WeWork India, the flexible co-working space provider, is in talks to raise Rs 1,000 crore in a round led by the Enam's Vallabh Bhansali, A91 partners, CaratLane's Mithun Sacheti and others at a valuation of Rs 3,000-4,000 crore, three people aware of the developments told Moneycontrol.
WeWork India is an outlier for the global company. Even as WeWork struggles to keep operations afloat, WeWork India said it clocked revenues of Rs 1,400 crore in FY23, had an EBITDA of Rs 250 crore and a profit after tax of roughly Rs 60 crore.
The money will be used to buy back stake from WeWork Global, which recently filed for bankruptcy, sources said. "The deal is however stuck with the Competition Commission of India (CCI) because such a large fund infusion in a market leader requires regulatory approval," one the people cited above told Moneycontrol.
WeWork did not immediately respond to Moneycontrol's queries.
The Embassy Group owns a majority stake of 72.5 percent in WeWork India. The remaining 27.5 percent is owned by 1 Ariel Way Limited, a UK entity that is a subsidiary of WeWork Global.
Established in 2017, the Embassy Group owned 100 percent of WeWork India, and the international interest came only in 2020, when WeWork put in $100 million in exchange for about 27.5 percent equity in the India franchise.
Since then, the global team has taken a page out of WeWork India’s playbook. “The global team needs continuous funding to grow their business. Ours is different, we are making money and do not need external capital. The global team looked at our model and how successful it was, then made it the benchmark for them to execute everywhere else in the world,” Virwani explained why his employees and building developers will escape unscathed. The Economic Times was first to report the development.
Following the success in India, WeWork has followed a similar model in Israel, South Africa, Latin America and China, among others, he added.
WeWork Global’s move to replicate the India model elsewhere is understandable. It has about 90,000 desks in the country and boasts of an occupancy rate of over 80 percent, which is beyond comfortable because it achieves break even at an occupancy rate of 57-58 percent, per Virwani. The company was on track to grow 40 percent year-on-year (YoY).
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