Co-working major WeWork India on Monday said it has raised Rs 550 crore from funds managed by BPEA Credit for future growth and acquisition opportunities as it seeks to tap rising demand for flexible spaces.
In 2017, WeWork Global had partnered with Bengaluru-based real estate firm Embassy Group to enter the Indian market. At present, WeWork India has a portfolio of around 70,000 desks spread over 6 million square feet area in 41 centres across six cities — Bengaluru, Mumbai, Gurugram, Noida, Hyderabad, and Pune. The amount will be used for future growth and potential consolidation opportunities, WeWork India said.
In 2020, WeWork India raised Rs 750 crore from WeWork Global, which the company said played an instrumental role in stabilising the business during the pandemic. WeWork Global has around 27 per cent stake in WeWork India. “Flexibility is paramount in today’s workforce and the investment by BPEA Credit stands testament to the massive growth opportunity for flex workspaces in India,” said Karan Virwani, CEO, WeWork India.
He said the investment also validates WeWork India’s strong fundamentals and healthy business model. “We are laser-focused on fuelling growth opportunities and fortifying our position as the leading flexible workspace brand with customisable and innovative solutions for all businesses,” Virwani said. WeWork India’s clients portfolio comprises 70 per cent enterprises while 30 per cent includes startups, freelancers, and SMEs.
Earlier this month, in an interview with PTI, Virwani had said, “Our revenue for this calendar year is estimated to grow to about Rs 1,300 crore. The revenue was Rs 760 crore in 2021.” WeWork India is not only EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive but also generating free cash flow to expand business and sustain the growth momentum, he had said. The EBITDA has jumped from a loss of Rs 120 crore in 2021 to a profit of Rs 175 crore in 2022 calendar year.
On the expansion, Virwani had said the portfolio would reach 6.5 million square feet by March and 8 million square feet by December 2023. “In terms of desks, we will reach around 1 lakh by end of the next calendar year,” he added. The company is looking at entering Delhi. WeWork India also recently made its first investment in the Bengaluru-based conferencing and collaboration platform Zoapi. Realty consultant Vestian in its recent report mentioned that ‘flexible workspace’ or ‘flexible space’ is a term used to cover a broad category of shared office space options that include co-working space centres, private offices, hot desks, executive suites, serviced centres, and managed offices.
Co-working centres are at the most flexible end of the spectrum while managed offices would be at the less flexible end, it added. At present, Vestian said the operational stock of nearly 45 million square feet of flexible workspace is spread across the key seven cities of the country, in over 2,000 centres managed by both organised and unorganised players. Apart from WeWork India, the major co-working players are Awfis, Smartworks, Simpliwork Offices, The Executive Centre, Skootr, 315Work Avenue, The Office Pass, Akasa Coworking and BHIVE Workspace, among others.
Real estate consultant Colliers India highlighted that flexible working operators are likely to lease 7 million square feet area this year, touching the highest ever in the country, after 2019. This represents a 2-fold increase from 2021 as flex space has seen immense demand from medium and large enterprises this year.