WeWork considers $1.9b deal for majority control of India affiliate

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% 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 Bangalore-based Indian real estate developer Embassy Group, while Karan is WeWork India CEO. The license 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. Its 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 chief executive officer, 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.

Neumann explained plans to improve the company’s finances to Bloomberg Businessweek this year, including the creation of an investment fund to buy stakes in buildings where it will be a major tenant. He’s won backing from deep-pocketed investors, including SoftBank Group Corp.

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 Inc. in Bangalore, and Spotify Technology SA and Bumble in Mumbai. The India unit projects to grow to 90,000 seats by March next year, the end of fiscal 2020.

Co-working startups are proliferating in the country, creating a thriving community for entrepreneurs and small startups. Co-working shot up to nearly 10% of total office space leasing from January to September 2018, compared with 4% the year before, according to a report by real estate services firm JLL.

Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.