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WeWork Gets Going In India With Billionaire Landlord

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India’s startup boom has spawned a multitude of providers of shared workspaces across the country, catching the attention of WeWork, the American coworking giant, that has the world’s largest such network. With 90,000 members in more than 100 locations in 14 countries around the world, WeWork is set to make its India debut this year with Bangalore property firm Embassy Group, founded by billionaire Jitendra “Jitu” Virwani.

“It will be Bangalore first as that’s our homeground, ” says Karan Virwani, 25, the billionaire’s oldest son, who initiated and led the year-long negotiations with the American firm. WeWork met several other Indian developers before its handshake with Embassy. “ We are culturally aligned, “ says Karan.

The first WeWork building to open in India, called WeWork Galaxy, is a 140,000 square foot space that will house 2,000 desks. Its location in Bangalore’s downtown precinct is far removed from the city’s buzzing tech zones with their armies of software engineers, such as Electronics City, where tech titans Infosys and Wipro are headquartered.

Backed by private equity firms Blackstone and Warburg Pincus, Embassy’s claim to fame is its development of sprawling tech and office parks extending to 30 million square feet, which have drawn a host of multinational tenants such as IBM, Microsoft and Intel. Virwani started working at his father's construction firm in his teens, then in 1993 launched on his own with $50,000 borrowed from friends.

Karan’s passage has been much easier though he seems to share his father’s instinct to make his own mark. An undergrad from the University of Kent, Karan returned home to plunge into the family trade as his father’s executive assistant. He soon figured that Embassy was missing out on an obvious opportunity: “Startups were mushrooming but there were simply no good quality offices for them. ”

For WeWork, it will be a low-cost entry into India as the firm is not putting in any of its own capital. While Embassy will invest in the real estate, We Work will, in exchange for a management fee and a slice of the profits, provide the design, technology and training, discloses Christian Lee, WeWork’s head of global development. “ We’ll follow the global playbook. We won’t be diluting the product in any way though we will customize it for the Indian context. ”

WeWork’s next stop is likely to be Mumbai where Embassy has leased a 190,000 square foot building in the Bandra-Kurla Complex, the city’s suburban financial hub, which houses the headquarters of several banks as well as the National Stock Exchange. “ It’s important to be in that center for our target customers, “ explains Karan. By the end of 2017, he foresees three centers will be opened, including one in Delhi.

As for cut-price local competitors, Lee maintains that WeWork faces that in abundance in its home market as well as in China, where it signed a deal last year with real estate group Sino Ocean. “ Local players have a substandard product compared to ours. We provide both space and services that allow businesses to become more productive. Ours is a global community that is a huge draw for small business owners.“ So, for example, WeWork’s Indian tenants will get an access card that can be used around the world.

While the offering will be a cut above, rentals will be “very competitive,” maintains Karan. Of late, WeWork has expanded its model to rent its workspaces to large companies such as Microsoft. Karan says they are in talks with large firms in India as well.

A Mumbai property tycoon says that the concept of shared spaces has the potential to be a serious business of the future. “ Embassy has gone into it on the front foot. There’s no other way to do it. “