U.S.-based WeWork’s potential exit from the Indian coworking market has reportedly been scrapped after the large deal encountered significant delays related to a valuation dispute.
Despite receiving approval from the Competition Commission of India (CCI) in June, the Economic Times reports that the transaction failed to move forward as both WeWork and India-based Embassy Group could not agree on the company’s valuation.
The initial plan involved the sale of WeWork’s 27% stake in its Indian subsidiary to Embassy Group, which holds the remaining 73%. The deal, which also included a 13% stake sale by Embassy, was also designed to introduce new investors to WeWork India and prepare the company for a potential public offering in India.
The failed transaction hasn’t stopped WeWork India from setting its sights on an IPO. Talks are reported to have started between Embassy Group and 360 One, formerly known as IIFL, for financing options as part of a plan that remains in the pipeline despite recent setbacks. It’s reported that Embassy Group will continue to explore options to leverage its shareholding for additional financing.
The news also comes at a time when the coworking sector in India is seeing a strong growth period amid surging demand for flex spaces. Business Standard reports that WeWork India’s competitor Awfis recently completed a successful initial public offering (IPO). Awfis’ stock price surged by over 83% since its listing, and it has raised expectations for similar performance from large competitors in the industry.
Meanwhile, WeWork India’s financial performance has reflected the rise of coworking in India. In February, the company posted a year-over-year revenue increase of 67.58% for the fiscal year ending March 2023, and for the first 6 months of 2024 the company has reported a 40% year-over-year revenue increase.
