WeWork’s India franchise has seen talks with local lender ICICI Bank Ltd on $100 million in funding break down since The We Company’s botched stock market launch, and is in early discussions to raise $200 million from new investors, the venture’s chief shareholder Jitu Virwani said on Thursday.
Virwani’s Embassy Group, backed by U.S. private equity fund Blackstone Group Inc, set up WeWork India two years ago and had been in talks to sell the bulk of the operation to WeWork’s global parent The We Company.
Virwani said those discussions had been put on hold indefinitely and that Embassy was raising around 40 billion rupees ($563.06 million) from sales of some its assets that it would invest in WeWork India if need be.
“Even if we have to put all that money … to grow WeWork India, we will continue,” Virwani, a Dubai-based billionaire whose son, Karan Virwani, heads WeWork India, told Reuters in an interview.
After one of the most dramatic collapses of a stock market flotation in recent memory, New York-based WeWork jettisoned founder and Chief Executive Officer Adam Neumann last month and embarked on a financial turnaround aimed at sealing new investment.
Investors have expressed concerns about its burgeoning losses as well as how well a business model that involves taking long-term leases and renting out spaces for the short term will weather a global downturn.
Unlike operations in other countries, like Japan, where WeWork has an ownership stake, Embassy set up WeWork India as a franchise, and was reported earlier this year by Indian media to be in talks to sell a 70% stake back to The We Company for $2.75 billion.
It currently has a capacity of 45,000 seats that it plans to double by the end of 2020, and has operations in six major cities across India.
“Adam Neumann or no Adam Neumann, our business is here to stay,” Virwani said at a roundtable discussion with journalists.
“Yes, it (WeWork’s IPO failure) has been a bit of a challenge for us, we had a bit of a setback when we were looking to raise $100 million from ICICI. But we’ve decided to put our own money into the business (if needed),” he added.