THE REALTY NEWS’ Post

WeWork Inc's plan to sell stake in Indian unit collapses The deal cleared by the regulator, as per a June 18 order, involved a two-step process that would see WeWork Inc. and Embassy together selling a stake of about 40% to new investors. WeWork Inc.'s plan to sell its 27% stake in WeWork India and exit the country has fallen through due to a valuation mismatch, despite receiving regulatory approval from the Competition Commission of India (CCI). The deal, part of a larger 40% stake sale involving WeWork Inc. and its Indian partner Embassy Group, was intended to bring in new investors, including the Enam group, A91 Partners, and CaratLane founder Mithun Sacheti, in a ₹1,200 crore transaction. Embassy Group was set to acquire WeWork Inc.'s stake and then bring in investors to prepare for an IPO. The deal's collapse is attributed to the rising market demand, highlighted by the success of rival Awfis's IPO, which was oversubscribed 108 times and saw a significant rise in share prices. Talks are ongoing between WeWork India’s CEO Karan Virwani and 360 One to buy part of the 27% stake held by WeWork Inc. WeWork India reported a 40% revenue growth in the first half of FY24, generating ₹831 crore. The Indian coworking sector has seen significant growth, with competitors like Awfis, Indiqube, and others reporting strong financial performances. Vivek Choudhary Ajay Choudhary Akshay Parnate #realestate #commercial #coworking #realestateindustry #pune

🚀 WeWork’s Strategic Exit from India: A game-changer for the co-working landscape! 🌟 WeWork Inc., once the world’s largest co-working space provider, has been navigating choppy waters lately. But now, it’s making a bold move: exiting its Indian venture, @WeWork India Private Limited. 🏢 @The Competition Commission of India (CCI) has given the green light for this significant departure. 🙌 🌐 The Two-Step Exit Plan Here’s how it works: First, Real Trustee Advisory Company and a group of independent investors will acquire a chunk of WeWork India’s share capital. 🤝 Simultaneously, the Embassy Group, WeWork India’s parent company, will take over 100% of the share capital held by @1 Ariel Way Tenant (OAW), a UK entity representing WeWork International. 🌎 WeWork India has been thriving, boasting revenues of ₹1,400 crore in FY23, an impressive EBITDA, and a profit after tax. 📈 With over 90,000 desks across 54 locations, it’s been a success story in the Indian market. Now, as WeWork Inc. spreads its wings globally, India bids farewell to this co-working giant. 🌏👋 #WeWork #BusinessExit #Corporate #Strategy #Business #Market #OfficeSpaces #Entrepreneurship #Business #Investment #India #BelieveIndia To read more in detail, click below:👇 https://lnkd.in/gs2CjG2f

WeWork to sell 27% stake in India unit via Rs 1,200 crore secondary deal WeWork Inc.’s plan to sell its entire 27% stake in its Indian unit has collapsed, people in the know told ET. In addition to bankruptcy-hit WeWork Inc., Embassy Group-promoted WeWork India was also looking to divest a 13% stake to a consortium of investors, including the Enam Group family office, A91 Partners, and CaratLane founder Mithun Sacheti in a Rs 1,200 crore secondary transaction, we reported first on April 22. Sources said the transaction didn’t go through due to a valuation mismatch. The deal cleared by the Competition Commission of India (CCI), as per a June 18 order, involved a two-step process that would see WeWork Inc. and Embassy together selling a stake of about 40% to new investors. By Samidha Sharma & Digbijay Mishra Read the full story here: https://lnkd.in/gHNbcE4r

WeWork is exiting India and losing money on its investment even though WeWork India is doing well. Embassy Group, a major Indian real estate developer, is making a power move with WeWork India. Embassy is buying out WeWork US's stake in WeWork India, essentially becoming the sole owner. But that's not all! They're then selling a chunk of WeWork India (40%) to some new investors (Enam Group, A91 Partners, and others) for a cool ₹1,200 crore. There are actually two interesting things to unpack here: 1/ Double the Valuation: The embassy buys WeWork India's stake from WeWork US for ₹700 crore, valuing the company at ₹2,600 crore. But then they turn around and sell a portion to the new investors at a valuation of ₹3,000 crore – that's a 16% jump! 2/ Who's Really Buying? Technically, the Embassy buys everything first. But let's be honest, they're just flipping a portion (13%) for a profit. In reality, the new investors are essentially buying 27% of WeWork India directly from WeWork US (for ₹700 crore) and another 13% from the Embassy (for ₹500 crore). This paints a different picture – a valuation of ₹3,800 crore, a whopping 46% higher than what WeWork US got! WeWork US is clearly in a tough spot and likely didn't have much bargaining power. The shareholder agreements between the Embassy and WeWork US might have given the Embassy the upper hand, allowing them to dictate the sale price. WeWork India seems to be doing well, so it's surprising they're selling their stake for less than their initial investment. What are your thoughts on this? #startup #wework #entrepreneurship

2023: WeWork US filed for bankruptcy with $13B in leases ❌ 2023: WeWork India does Rs. 1,300 Crores of EBITDA+ annual revenue 💰 How is WeWork so successful in India but failed in the USA? 🤔 Let’s dive into the 4 major differences👇 1./ Right Product-Market Fit 🧑💻 WeWork India has only focussed on the Tier-1 market and maintained itself as a premium brand. Work USA expanded anywhere to achieve growth figures of 400% on a year-on-year basis. It chased growth over sustainability. WeWork India is only in the Top 7 cities: ✅Bengaluru ✅Chennai ✅Gurugram ✅Hyderabad ✅Mumbai ✅NCR Delhi ✅Pune 2./ Using Asset-Light Model 🏗️ WeWork India used the asset-light model instead of going only for long-term leases (10-15 years). In asset-light models, all capital expenditure is incurred by property owners. Currently, they have 2 such models: ✔️ Revenue Share Model 💵 Revenue gets shared between the owner & WeWork in almost 50-50%. It is a pure risk & reward-sharing model. ✔️ Hotel-Operator Model 🏨 WeWork gets a management fee and the majority of the profit goes to the landowner. It’s similar to how big hotels like Four Seasons operate. 3./ Not Expanding Verticals 🔎 WeWork USA expanded to: 👉 WeLive: A co-living model 👉 WeGrow: A private school for children However, WeWork India has maintained a focus on the CORE co-working model. 4/. Ownership Structure🤵♂️ WeWork USA only owns 27% of the Indian franchise. The majority stake of 73% is owned by Karan Virwani's, the founder's, family company - The Embassy Group. This maintains complete control over vision & long-term decisions. Watch the latest episode of Wireframe as we cover this in-depth ✨👉 https://lnkd.in/gWEJ6mQj

We all know the story of #WeCrashed. Here’s the lesser-known tale of the country where the firm succeeded—India. While this story may not have a Jared Leto or Anne Hathaway, it’s still full of twists and turns… ...especially navigating India’s challenging market, which turned out to be one of the giant’s biggest successes. Let me break it down for you… 1. The Partners - Instead of a solo venture, WeWork established a 50:50 Joint Venture with one of India’s leading real estate developers Embassy Group in 2017. - An established partner seeded the JV with local expertise, market knowledge and a strong existing portfolio. 2. The Structure - A 50:50 partnership helped distribute risk and align interests. Karan Virwani, the son of Embassy Group’s founder Jitu Virwani, was appointed as the CEO of WeWork India, ensuring the brand was well-adapted to the local market. 3. WeWork India’s Growth - The firm leveraged Embassy Group’s existing portfolio and contacts in tech-centric cities like Bangalore, Mumbai, and Gurugram. - This focus, backed by strong funding and a shift towards enterprise clients, helped the firm quickly become a market leader by 2019. 4. Path to Profitability - In contrast to WeWork’s global strategy, WeWork India grew sustainably (operating over 90,000 seats), becoming one of the few profitable markets globally in 2021. - WeWork India started to consider its own IPO (Note: the firm remained separate from WeWork’s global IPO) 5. Acquisition & Future Plans - After filing for Chapter 11 bankruptcy, WeWork sold its stake to Embassy Group in June 2024. - The company retains the WeWork brand, and leadership intends to take the company public within 18 months. Do I sense another Apple TV series on the horizon? #FutureOfWork 📷 via The Economic Times

www.resolvoassociates.com WeWork Inc. Receives CCI Approval to Exit Indian Market WeWork Inc., the American co-working space provider, has obtained the green light from the Competition Commission of India (CCI) to sell its entire 27.5% stake in its Indian subsidiary. This sale is a crucial part of a two-step process where both WeWork Inc. and WeWork India's parent company, Embassy Group, will divest approximately 40% of their shares in the Indian unit. #WeWork #WeWorkIndia #CCIApproval #BusinessNews #IndianMarket #EmbassyGroup #VolradoVentures #RealEstate #StartupNews #Investment #CoWorkingSpaces #IndiaBusiness #FinancialNews #MarketExit #CorporateStrategy #BusinessUpdate #WeWorkGlobal #BankruptcyRecovery #RevenueGrowth #CoWorking #OfficeSpaces #RealEstateInvestment #WeWorkExit #BusinessStrategy #EconomicNews #IndiaInvestments #CommercialRealEstate #WeWorkSuccess #MarketShift #CorporateNews #StartupIndia

WeWork: Bankrupt; WeWork India: IPO pathway WeWork India is a 73%::27% JV between Embassy Group & WeWork - Embassy Group has thus far done a phenomenal job on executing the co-working playbook (1) Embassy stands to make substantial money from just this change of ownership: - WeWork's 27% stake (₹700 crore) gets bought out at a ₹2600 crore valuation - A 40% stake will then be sold to PE investors for ₹1200 crore at a ₹3000 crore valuation (2) WeWork India is very well run - FY 23 revenue was ₹1300 crore (almost x2 what it was in FY 22) - Cut its loss from ₹700 crore to ₹100 crore (FY 22 v/s FY 23) - And, WeWork became EBITDA +ve in FY 23 (and, in FY 24, it generated ₹500 crore of EBITDA in the first 6 months) (3) My take on why WeWork India succeeded? (a) Embassy ran it like a real estate business (NOT a Tech company); their office park REIT is a good example of their execution. (b) Embassy went after Enterprise clients (80% of seats) who are sticker & pay more per seat (including value added services) (c) Embassy owns (large chunks of) real estate which WeWork India leases (i.e. full stack approach) (d) The WeWork brand just works :) Embassy plans to take WeWork India public. (i) Yesterday, Awfis (co-working space operator backed by PeakXV) also got the SEBI nod to go public (ii) Perhaps, we will soon see a larger set of co-working companies IPO (e.g. 91Springboard) ➡️Glad to see that Embassy Group has created a 5% ESOP pool (would be worth ~₹150 crore upon the stake sale to PE investors)

Embassy Group's acquisition of WeWork's 27% stake in WeWork India for approximately ₹700 crore signals a strategic move towards taking the coworking office platform public within 18 months. Post-acquisition, Embassy Group will own 100% of WeWork India, with plans to divest a 40% stake to Enam Group, A91 Partners, CaratLane founder Mithun Sacheti, and others for ₹1,200 crore. The remaining 60% stake, inclusive of 5% as Esops, will set the stage for WeWork India's IPO, anticipated by the end of the year. WeWork India's robust performance in terms of revenue and profitability fuels confidence in its growth trajectory, although regulatory approvals from the Competition Commission of India (CCI) and the Reserve Bank of India (RBI) are prerequisites for the transactions. Despite WeWork's complete exit, WeWork India will retain the brand through a franchise agreement, paying a franchise fee of approximately 2% to the global coworking giant. WeWork WeWork India #wework #stock #india #embassy #coworking #office