WeWork India is opening new coworking spaces across the country, including three in Bengaluru, two in Hyderabad, and one in Noida — even as the company battles plummeting valuation and investor faith in its global business.
According to a media report, the company’s India arm has planned a total of three office spaces in Noida, and has leased 3 Lakh sq ft space with a capacity to accommodate 3.9K seats.
This development comes on the heels of an ongoing controversy around WeWork’s IPO plans. Ever since the company filed for its initial public offering (IPO) in August, it has faced flak for losses and its vague business structure and model. Many have raised questions what makes WeWork a tech company, which is what has driven up its valuation. Following which, the company’s biggest investor SoftBank reportedly suggested that the company put brakes on going public.
Also, multiple media reports said that WeWork directors have been planning to propose the stepping down of WeWork’s global CEO Adam Neumann. This move is said to be also being supported Masayoshi Son-led SoftBank.
It was being speculated that SoftBank’s support for Neumann’s stepping down is to prevent the company from going public. This would be a better plan for SoftBank as it would prevent a writedown for SoftBank, which last invested in WeWork valuing the company at $47 Bn earlier this year. Last month, SoftBank was also reported to planning a fresh investment in WeWork.
WeWork India currently has 26 operational coworking centres across Bengaluru, Gurugram, Mumbai, and Pune. Launched in September 2017, WeWork India operates on a brand franchisee model controlled by Embassy Buildcon LLP, which is owned by real estate billionaire Jitu Virwani and his son Karan Virwani.
Some media reports have suggested that WeWork was in talks to buy around 70% of WeWork India at a valuation of about $2.75 Bn. However, after the company’s postponed IPO, the subsequent acquisition was estimated to be less likely.
According to The State of the Startup Ecosystem Report by Inc42, India has over 300 coworking spaces with over 720 centres and a total area of 15 Mn sq ft. After being adopted in Tier 1 cities, the trend is now spreading its wings to Tier 2 and Tier 3 cities as well.
Other notable players in the Indian market include GoWork, OYO Workspaces, Awfis, and 91Springboard. Recently in August, Gurugram-based GoWork has raised $53 Mn debt funding from BlackRock’s Private Credit team. CLSA Capital Partners’ Special Situations Group also participated in the round.