WeWork India is a brand franchisee controlled by Buildcon, owned by Jitu Virwani of Embassy Group and his son Karan Virwani.
WeWork Cos. is considering a deal to take majority control of its India affiliate, according to people familiar with the matter, a deal that would allow the shared-office startup to consolidate financial results from the fast-growing unit as it prepares for an initial public offering this year.
The New York-based company is in talks to buy around 70 per cent of WeWork India at a valuation of about $2.75 billion, said one of the people, who asked not to be named because the discussions are private. The deal, $1.9 billion at those terms, would be part cash and part stock, and could close as early as August, the person said.
The transaction isn’t finalized, so terms may change or the talks could break down.
WeWork India is a brand franchisee controlled by Buildcon LLP, which is owned by real estate billionaire Jitu Virwani and his son Karan Virwani. The elder Virwani is Chairman and Managing Director of Bengaluru-based real estate developer Embassy Group, while Karan is WeWork India CEO. The licence ends in 2021.
Adding India to its asset portfolio may benefit WeWork, as it preps for its initial public offering. It’s aiming to avoid the kind of rocky start Uber Technologies Inc.
endured after it went public in May. Uber’s swooning shares cast a shadow over the unicorns like WeWork that are seeking to raise money from public investors for the first time.
WeWork, founded in 2010 and last valued at $47 billion, pioneered the concept of shared work spaces, expanding to 425 office locations in 36 countries. With trendy work areas, colorful phone booth-like conversation areas and lively community hangouts serving beer on tap, the startup has reshaped office practices around the world.
Adam Neumann, Co-founder and CEO, has built the company by cultivating an eccentric office culture, down to its mission statement to "elevate the world’s consciousness." Still, WeWork has yet to prove it can make money, with losses more than doubling last year to $1.93 billion, while revenue also more than doubled to $1.82 billion.
India is one of WeWork’s fastest-growing markets, with 35,000 seats in more than 20 shared locations 18 months after launch. It hosts companies such as Microsoft Corp. and Amazon.com in Benga-luru, and Spotify Techn-ology SA and Bumble in Mumbai. The India unit projects to grow to 90,000 seats by March next year, the end of fiscal 2020.