WeWork India, a joint venture between US-based co-working space provider WeWork and Bengaluru-based property developer Embassy Group, is in talks with marquee global investors such as KKR, TPG, and Goldman Sachs to raise funds of over $100 million (Rs 640 crore).
WeWork is the largest co-working space provider in the world. “They have plans to invest $100 million over the next three to four years to open centres in major cities and they need funds for that,” said a source in the know.
According to the source, WeWork India could go for either debt or equity deals or do structured debt deals with private equity (PE) funds. “WeWork must have spoken to US-based funds as they understand its business better. It can also offload a stake in the business,” said an executive with a PE firm.
When contacted, Karan Virwani, director at WeWork India, declined to comment. TPG and KKR did not say anything, either. Goldman Sachs could not be contacted for comments. WeWork plans to have a million square feet in Mumbai, Bengaluru, the National Capital Region (NCR), and other cities by the end of the year.
The company offers a tech-enabled platform, along with collaborative, community office space and services for budding entrepreneurs, small businesses, freelancers, and established companies. In March this year, global investor SoftBank invested $300 million in WeWork. The 25-year-old Embassy Group scion, Karan Virwani, along with Juggy Marwaha, former managing director (South India), JLL, and Nikhil Arora of the WeWork global team, is spearheading the WeWork India team.
By the end of this year, WeWork aims to add 15,000 members to its international community, solely from India, Virwani had said earlier. The first flagship WeWork building, in the heart of Bengaluru on Residency Road, will be launched this year. Called Embassy Galaxy, a standalone building with 140,000 square feet of office space, it will house over 1,800 members.
This will be soon followed by the launch of the second centre, a 190,000-square feet standalone building owned by the Enam Securities Group in the Bandra Kurla Complex, Mumbai. WeWork has taken the entire building on lease. “WeWork India has confirmed the intent to launch both buildings by the middle of this year and the NCR by the end of the year,” he said. The co-working firms are expanding fast in the country. Although major co-working operators leased only 1.2 million square feet in 2016, accounting for three per cent of the leasing volume, Colliers International expects co-working players will lease 8-9 million square feet by 2020.
Colliers said that the concentration of co-working space will intensify in Bengaluru, Mumbai and Gurugram due to the availability of adequate infrastructure and opportunities for start-ups in those cities.
“Hyderabad may also pick up pace as companies such as Apple, Google and Amazon have recently taken large office spaces in the city, which will create further opportunities for start-ups. Among Tier-II locations, cities such as Pune, Jaipur, Chandigarh, Ahmedabad and Kochi, with a high presence of technology companies, should also witness the emergence of co-working hubs,” it said.
“India offers a great opportunity for co-working space operators to profit from the rising demand for flexible, innovative and collaborative workspace designs,” said Surabhi Arora, associate director, research, Colliers International India.
