WeWork India raises funds from BPEA Credit

Flexible workspace provider WeWork India on Monday said it has raised Rs 550 crore from funds managed by BPEA Credit.

The funds will be used for future growth and potential consolidation opportunities, the office space provider says in a statement.

After commencing operations in India in 2017 with 100,000 sq ft and 2200 members, WeWork India, over the last five years, has progressed to over 62,000 members and over 6 million square feet across 41 locations and six cities in India - Bengaluru, Mumbai, Gurugram, Noida, Hyderabad, and Pune.

According to CRISIL Ratings, net leasing of commercial office space in India will grow 10-15% this fiscal and in the next one to 28-30 million square feet (msf) and 31-33 msf, respectively, riding on improvement in demand as employers increasingly favour employees working from office, albeit with some flexibility. Demand will be below the pre-pandemic high of around 42 million square feet in fiscal 2020, but within sniffing distance of the fiscal 2019 mark of around 34 msf, the ratings agency said last week.

“While global recessionary headwinds and slower hiring in technology may lead to a possible deferment of leasing plans, thereby subduing demand growth in the next two quarters, the strength of the Indian economy and competitiveness of commercial real estate will keep the demand drivers intact,” it added.

Earlier this year, WeWork India announced its first profitable quarter, followed by new leasing announcements across its major operational cities. The company claims it turned profitable this calendar year, clocking a revenue of ₹1,300 crore. Currently, the EBITDA jump is 250% from a loss of ₹120 crore in 2021 to a profit of ₹175 crore in 2022, it says.

“Flexibility is paramount in today’s workforce and the investment by BPEA Credit stands testament to the massive growth opportunity for flex workspaces in India and validates WeWork India’s strong fundamentals and healthy business model. We are laser-focused on fuelling growth opportunities and fortifying our position as the leading flexible workspace brand with customisable and innovative solutions for all businesses,” says Karan Virwani, CEO, WeWork India.

WeWork India had raised ₹750 crores in 2020 through funding from WeWork Global which played an instrumental role in stabilising the business during the pandemic. The company also recently made its first investment in the Bengaluru-based conferencing and collaboration platform Zoapi which offers innovative and immersive solutions to businesses.

WeWork India says its member portfolio comprises 70% of enterprises such as 3M, Honeywell, Dyson and KIA, while 30% includes startups, freelancers, and SMEs.