US-based office space provider WeWork Global has bought 20% stake in WeWork India, a fully-owned subsidiary of Bengaluru-based estate developer Embassy Group, for $100 Mn as the company looks to scale up India operations over the next 36 months. The transaction valued the WeWork India business at around $500 Mn.
WeWork is currently present in 34 locations across six markets in the country, including Bengaluru, Gurgaon and Mumbai. The firm has also entered into a revenue share model with Embassy Office Parks REIT, the first publicly-listed Real Estate Investment Trust in India, for a 2.5 lakh sq. Ft office property in Manyata Tech Park, Bengaluru.
Karan Virwani, CEO of WeWork India said, “India is one of the key markets for WeWork.The fresh round of capital from our long-term partners at WeWork global represents a vote of confidence in our strategy and in India operation. Sandeep Mathrani, global CEO of WeWork will also have a board seat in the India operation.”
“We were profitable till March but the COVID-19 outbreak has hit profits. In the last six months, the revenue growth was at 25%, which is lower than the last three years average. We are expecting to close the year with 35,000 members mainly led by large enterprises that form 60% of our portfolio,” added Virwani.
In recent months, the company has signed 12,000 desks with large enterprise clients like NetFlix India, Commonwealth Bank of Australia and John Deere.
With the funding, Sandeep Mathrani, Global Chief Executive Officer of WeWork, is now also part of WeWork India’s board. Currently, Embassy Group owns 93 percent of WeWork India, while The We Company owns 7 percent stake.