WeWork Exits Indian Subsidiary, WeWork India Private Limited

Preeti Bali / 1:22 pm / June 20, 2024

The Competition Commission of India (CCI) has greenlit the departure of WeWork Inc. from its Indian co-working space venture, WeWork India Private Limited. This move marks a complete separation of the American company from its Indian counterpart.

Shifting Ownership Structure Facilitates Exit

The CCI outlined the specific structure of WeWork Inc.’s divestment. Real Trustees, acting on behalf of Volrado Ventures (an alternative investment fund registered with SEBI, India’s securities regulator), will acquire a portion of WeWork India’s share capital. Additionally, Embassy Buildcon, a limited liability partnership focused on real estate development in India, will take over ownership of One Alliance Office (OAW), a previously held entity by WeWork Inc.

Embassy Group Retains Control of Thriving Indian Unit

It’s important to note that Embassy Buildcon is part of the Embassy Group, a Bengaluru-based real estate firm that has held a majority stake (around 70%) in WeWork India since its inception. This move essentially allows Embassy Group to solidify its control over the successful Indian co-working operation.

WeWork Inc.’s Financial Restructuring Paves the Way for Exit

WeWork Inc.’s decision to exit the Indian market comes after a period of significant financial restructuring. The company filed for Chapter 11 bankruptcy in the United States last November. Since then, WeWork has emerged from bankruptcy with a reduced debt burden of $4 billion. John Santora has also recently been appointed as the new CEO of WeWork Inc.

WeWork India Demonstrates Strong Financial Performance

In contrast to WeWork Inc.’s financial struggles, WeWork India has exhibited impressive financial health. Under the leadership of Embassy Group, the Indian subsidiary has achieved significant growth. Revenue for the fiscal year ending March 2023 soared by 67.6%, reaching Rs 1,314 crore compared to Rs 784 crore in the previous year. Additionally, WeWork India managed to significantly reduce its losses, with a decrease of 77.29% to Rs 146 crore in FY23.

Competitive Landscape of India’s Co-working Market

WeWork India operates in a dynamic co-working market within India. Awfis, a recent entrant to the public market, presents a key competitor. In the first nine months of FY24, Awfis reported Rs 616 crore in revenue with a minimal loss of Rs 19 crore. Other notable players in the Indian co-working space include 91 Springboard, AltF, and OfficePass.

This strategic move by WeWork Inc. allows them to focus on their core business in the United States while WeWork India, under the continued leadership of Embassy Group, appears well-positioned to capitalize on the growing co-working market in India.

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