BENGALURU: We-Work India, a fully-owned subsidiary of Embassy Group, plans to raise $200 million (about Rs 1,421 crore) to fund its growth and more than double the number of desks it operates to 100,000 by 2020 from 48,000, even as the company battles falling valuation and investor faith in its global business.
Since the launch of the American shared workspaces provider in India, the Bengaluru-based Embassy Group has invested Rs 1,500 crore in the WeWork affiliate. It operates desks across the top six markets in the country, including Bengaluru and Mumbai.
“WeWork India has grown faster than any other global locations. We are in talks with global and domestic investors to raise money, mostly as structured debt,” said Jitu Virwani, chairman, Embassy Group.
The fundraising plans come amid controversy around WeWork’s initial public offering. We-Work’s parent, The We Company, withdrew IPO a week after the SoftBankbacked flexible office startup ousted founder Adam Neumann as its chief executive.
Embassy Group is also in the process of raising ₹4,000 crore through divestment of assets to retire debt and invest in We-Work India expansion. “We are raising capital to keep liquid cash. Some part of it may go for WeWork growth too,” said Jitu Virwani.
The real estate developer currently has around ₹7,000 crore debt. The company holds the franchise for WeWork in India till end of 2021. It would like to retain the brand but WeWork holds the first right of refusal and can buy the Indian realty developer out.
Embassy Group had paid around $200 million for the franchise two years ago.
Source: Small Biz-Economic Times