In the world of business, contrast is not a common phenomenon. Its occurrence might be rare, but it certainly has a presence in the existing business world.
WeWork, an office sharing firm is a fitting example of this.
While the US-based firm is going through tough times which comprises financial crisis, deferment of its IPO and replacement of its founder CEO, company’s joint venture in India is on expanding spree.
Embassy Group, which owns around 90% in JV with The We Company to operate its co-working brand WeWork in the country, is entering Noida. The company has reportedly taken on lease over 3 lakh sq ft office space to open three co-working centres offering about 3,900 seats.
WeWork India has taken area on lease from Berger Group, Logix and Advant India for opening three new facilities. As per the company, the co-working space has been witnessing a rise in demand from freelancers, consultants and corporates.
The Bengaluru-based firm, which pays a management fee (of about 12% of revenue) to WeWork, claims to see no impact of US-based WeWork’ parent – The We Company deferment of IPO plan on the Indian operation.
Though, in June, Embassy Group chairman Jitu Virwani had held talks with WeWork to sell its majority stakes at over $2.4 billion valuations. The talks did not fructify majorly due to high valuation.
With WeWork valuation crashing down, it has also, for the time being, closed early exit opportunity that Embassy saw while venturing into the segment. Now there is not much option for Embassy other than investing more and be able to find a buyer.
US-based co-working giant had officially kicked off its operations in India with the launch of WeWork Galaxy, a 2200 members co-working space in Bengaluru in 2017.
WeWork currently has 26 operational co-working centres in the country comprising about 46,000 seating capacity. It has already covered major Indian metropolitan cities by opening nine working centres in Bengaluru, 10 in Mumbai, 1 in Pune, and 6 in Gurugram.
Last year, WeWork had introduced the concept of ‘WeWork Labs’ which offers tailored programs to early-stage startups by creating an ideation hub and helping them partner with incubators, accelerators, and large enterprises.
The first Lab in India was opened in Gurugram in October 2018 for Rs 17,000 per person per month.
At present, WeWork counts CoWrks, Awfis, and Innov8, among others as its major competitors in the Indian ecosystem.
In India, the co-working market is at a nascent stage. The first six months of 2019 saw 4 million sq ft of office space leased by co-working platforms in top cities, according to Knight Frank India report.
This development was reported first by PTI via TOI.