The New York City-headquartered company provides collaborative desks and offices to freelancers, small businesses and entrepreneurs
Shared workspace provider WeWork may own at least 51 percent stake in its Indian operations through a licensing deal, The Times of India reported. Embassy Group's Jitu Virwani currently oversees the Indian arm of the company.
The deal could be valued at $1 billion and will be discussed by the teams of Virwani and WeWork later in January, sources told the paper. The New York City-headquartered company provides collaborative desks and offices to freelancers, small businesses and entrepreneurs. India is one of the fastest developing markets for the company, therefore it wants to take control before the licensing deal ends in 2021.
There were reports of WeWork's main shareholder SoftBank cutting fresh investment to just $2 billion from $16 billion and this may impact its buyback.
The number of shares for sale will depend on valuation, sources said. Reports suggest that SoftBank has pumped nearly $10 billion into WeWork, which still has $7 billion in cash.
The Embassy Group is a leading office developer in India and has developed 35,000 desks across 17 locations for WeWork India. It aims to touch 90,000 desks by December end, which was originally the target for 2021. If this target is met, the company could be valued up to $2 billion, a source told the paper.
The company has carried out fund-raising skilfully by leveraging its technology and aesthetics to build productive workplaces, which valued WeWork at $45 billion. However, investor sentiment has been drab for the Indian arm of the company. If it meets the 90,000-desk target, it may earn a revenue of Rs 1,500 crore in 2019."WeWork's exponential growth across three major cities in the last 18 months has proven that they are still scratching the surface. There are only a few quality players like CoWrks and Awfis who can really give them any competition," JLL India Executive MD Juggy Marwaha told the paper.