WeWork India has raised INR 5.5 billion (about $66.5 million) from funds managed by private credit platform BPEA Credit as the flexible office brand seeks to expand in Asia’s third-largest economy.
The funds will be used for future growth and potential acquisition opportunities, according to a report in The Economic Times. Karan Virwani, chief executive of WeWork India, cited the country’s “massive growth opportunity for flex workspaces.”
Launched in 2017 as a partnership between Manhattan-headquartered flexible office giant WeWork and Bengaluru-based property developer Embassy Group, WeWork India currently has 41 locations in six cities, including Bengaluru, Mumbai, Gurugram, Noida, Hyderabad, and Pune. The company’s portfolio spans about 70,000 desks across 6 million square feet (557,418 square metres) of real estate.
BPEA Credit is the India-focused arm of BPEA EQT, the Hong Kong-based alternative investment firm formed by the merger of Swedish investment firm EQT AB and BPEA (Baring Private Equity Asia) in October.
Business Sees Profitable Year
The fresh fundraise comes in the same month it was reported that WeWork India had leased out 50,000 square feet of space at its new location in Gurugram to Australia National Bank. The co-working company raised $27 million in debt and equity from undisclosed investors in April of last year.
WeWork helped stabilize WeWork India during the pandemic by investing $100 million in the Indian business in June 2020. The investment also gave the US company a 20 percent stake in WeWork India, which has since increased to 27 percent, according to a Press Trust of India report.
Virwani said that WeWork India had its best year in 2022 in terms of profitability and revenue, reporting 250 percent growth in EBITDA (earnings before interest, taxes, depreciation, and amortization), according to a news account in mid-December.
The company recorded a profit of $21.2 million in 2022 after seeing loss of about $14.5 million in 2021, Virwani added. By March 2024, the company plans to add over 1 million square feet of flexible office space across India, boosting its portfolio to 95,000 desks.
WeWork India’s clients include 3M, Honeywell, and law firm Khaitan & Co. Large enterprises account for 70 percent of the company’s portfolio, while startups, freelancers, and small- and medium-sized firms make up the rest.
The average “managed office” for a large enterprise includes 1,000 to 1,500 desks, compared to 600 to 700 desks before the pandemic. Occupancy at WeWork India’s centres reached 80 percent in April of this year, as employers increasingly asked workers to return to the office, the company said.
BPEA Credit has offices in Singapore, Mumbai, and Delhi and is currently investing out of its third fund, which closed in November at $475 million. The platform focuses on providing flexible growth capital to the mid-market sector in Asia, defined as businesses turning over between $50 million to $500 million in revenue.
The merger of EQT and BPEA combined the Asia private equity teams of the two firms to create BPEA EQT, while BPEA’s Asian real estate business was integrated into EQT’s real estate division, EQT Exeter. BPEA chalked up Australia’s biggest-ever hotel purchase by agreeing to buy the five-star Hilton Sydney from Bright Ruby Resources for A$530 million ($364.7 million) in May of this year.