WeWork in talks to buy around 70% stake of in its Indian subsidiary WeWork India for $1.9 Billion.
Post acquisition WeWork valuation to reach about $2.75 billion.
WeWork has its fastest-growing market in India, with 35,000 seats in more than 20 shared locations in 18 months of post-launch.
New York-based shared office space manager WeWork Cos is stepping forward to have a deal to acquire a majority stake of its affiliate WeWork India. According to the Bloomberg report WeWork is in talks to buy around 70% stake in its Indian subsidiary WeWork India for $1.9 Billion thus making it to reach a valuation of about $2.75 billion in cash and stock deal and $1.9 Billion deal is expected to close as early as August.
WeWork India is a franchise controlled by Jitu Virwani a real estate tycoon and his son Karan. Virwani is chairman and managing director of Bangalore-based Indian real estate developer Embassy Group and Karan is CEO of WeWork India and its license ends in 2021.
Including Wework India to its asset portfolio may assist WeWork because it is soon going to offer its initial public offering. It’s focusing to prevent the sort of rocky initiation Uber Technologies Inc. suffered after it went public in May. Its swooning shares put a negative impact on the unicorns like WeWork that are focusing to raise money from public investors for the first time.
WeWork came into action in 2010 and was valued $47 Billion and it brought the concept of shared workspace expanding to 425 office locations in 36 countries. WeWork has transformed the way offices work around the world it has introduced lively community hangouts serving beer on tap, colorful phone booth-like conversation areas and modern work areas.
WeWork losses have doubled more than to last year to $1.93 billion and revenue also enhanced twice to $1.82 billion. WeWork has its fastest-growing market in India, with 35,000 seats in more than 20 shared locations in 18 months of its post-launch. It hosts companies including Amazon.com Inc. and Microsoft Corp. in Bangalore, and Bumble and Spotify Technology SA in Mumbai. The India unit projects to grow to 90,000 seats by the end of fiscal 2020.
Co-working sector is becoming a popular Indian market and so are startups working in this domain and are generating more revenue. Awfis another major co-working startup is also giving tough competition to WeWork in India. It is currently operating 63 centers, housing 30,000 seats, across 10 cities. It charges between Rs 5,000 to Rs 20,000 per seat, but the average cost is Rs 10,000. It is targeting to double its capacity to 60,000 seats by March 2020.
Company is also planning to expand its business in five more cities including Indore, Ahmedabad, Kochi, Bhubaneswar, and Jaipur by the end of this fiscal year. Company is also targeting to achieve revenue of more than Rs 300 crore in 2019-20 fiscal. Currently, the company revenue has already touched to Rs 20 crore, and this is expected to rise to around Rs 35 crore by March next year.
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