With WeWork's IPO Delayed, a Look at its Impact on the Indian Arm
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One of the most iconic companies at one point in time, the workplace sharing platform WeWork, seems to be the worst hit now. According to a report by Reuters, WeWork has shelved its IPO scheduled for this year after a cold response from its investors. And this will have an a domino effect on the Indian arm, WeWork India.
WeWork’s stock market mess will impact the Indian arm of the co-working company. The Indian branch is led by Embassy Group leader Jitu Virwani’s son Karan Virwani. And now with the postponing of the IPO, the group acquiring a majority stake of 70 per cent will also see a delay, according to a report by Mint. WeWork offered to buy the same in a cash and stock deal, said the report.
Launched in 2017, WeWork India began its operations with an investment of $25 million dollars. It has leased three million sq feet of office space in Gurgaon, Mumbai and Bengaluru, built 35,000 desks and caters to over 20,000 members, including Twitter India, GoDaddy, Discovery India with around 350 employees.
The Domino Effect
Earlier it was reported by several media houses that, The We Company, parent company of WeWork is bringing down its valuation to $10 billion, less than one-fourth of the $47 billion valuation of the company a week ahead of its IPO. There were also reports of WeWork’s co-founder and CEO, Adam Neumann, flying down to Tokyo to meet the company’s biggest backer, Softbank, to seek help potentially in the form of funds.
With WeWork’s dismal situation, came others also under the lens including SoftBank, Cab aggregators Uber and Lyft which are backed by the Japanese star investor and have seen a disappointing run at the stock market. It is safe to say that Uber's stock market failure has had a domino effect on some companies and the investor thereafter.
In another report by CNBC, the company gathered all the employees in a meeting to discuss the current situation and the IPO. Neumann, apparently, told his employees that the delay would help them prepare better for a public listing and also give them the time to position themselves in a better capacity before the investors.
If the listing would have happened, then the Indian arm would have benefitted with respect to capital raising and expansion but for now Embassy Group will continue to run the business like before.