WeWork Inc. is exiting the Indian market, selling its 27% stake as part of a 40% divestment involving Embassy Group. Amidst its U.S. bankruptcy, WeWork India’sIndia’s growth surged, showing a 68% revenue increase in FY23. The deal awaits the approval of the Competition Commission of India.
WeWork Inc., the renowned U.S. coworking giant, has announced plans to exit the Indian market altogether, as it intends to sell its entire 27% stake in its local unit. This strategic move is part of a broader divestment involving WeWork and Bengaluru-based real estate developer Embassy Group, which will decrease its ownership from 73% to 60%. A consortium of new investors, including the Enam group family office, investment firm A91 Partners, and CaratLane founder Mithun Sacheti, is set to acquire the combined 40% stake. The transaction is pending approval from the Competition Commission of India (CCI).
In a statement to the Economic Times, a source familiar with the matter revealed, “U.S. office-sharing company WeWork Inc. is set to exit the Indian operations by selling its entire 27% stake in the local unit through a secondary transaction.” This exit reflects a strategic shift in WeWork’s global operations, particularly after filing for Chapter 11 bankruptcy in the U.S. last November.
Despite the challenges faced in the U.S., WeWork India showcased robust performance with a reported revenue of Rs 1,300 crore in FY23, marking a growth of about 68%. Additionally, net losses significantly narrowed by 80% to Rs 146 crore during the year. The firm’s strong foothold in India is evidenced by its extensive network of over 70,000 paying members and 90,000 desks nationwide.
The decision to exit the Indian market contrasts sharply with the current surge in demand for coworking spaces post-pandemic. As the industry sees revitalisation, several other coworking platforms, such as Awfis, which is eyeing an IPO in 2024, Indiqube, CoWorks, 91Springboard, and Bhive, continue to report positive growth. This trend underscores a broader shift towards flexible workspaces, driven by large enterprises and startups seeking adaptable and innovative office solutions.
This sale is pivotal for WeWork as it reevaluates its global strategy and footprint amidst operational restructuring. With India’s coworking market burgeoning, the entry of new players and additional investment are expected to energise the sector further, providing a fertile ground for innovation and growth in commercial real estate.
The dynamic landscape of India’s coworking spaces, characterised by a demand for high-quality, flexible office environments, reflects a maturing market ready to accommodate the next wave of growth in the sector. As WeWork repositions its global strategy, the industry watches keenly to see how this divestment will influence the market dynamics and the opportunities it will unveil for other players.
About WeWork Inc, WeWork India, and The Embassy Group
WeWork Inc., the global coworking leader, has significantly shaped the modern workspace landscape with its innovative approach to office environments. The company, founded by Adam Neumann and Miguel McKelvey, revolutionised how businesses think about workspaces, promoting flexibility and community. Despite challenges, including a high-profile bankruptcy filing in the U.S., WeWork is working hard to maintain its global presence.
In India, WeWork entered the market through a joint venture with the Embassy Group in 2017, establishing WeWork India. The collaboration leveraged the Embassy’s solid local real estate expertise, enabling WeWork to expand rapidly across major Indian cities. WeWork India thrived, reporting significant growth with over 70,000 paying members and 90,000 desks nationwide. This success story is a testament to the adaptability and appeal of WeWork’s coworking model in diverse markets, even as WeWork Inc. decides to divest its stake and exit the Indian market.
