Unlike most other inheritors, Karan Virwani pushes the boundaries, be it a joint venture with an overseas start-up or investing in cryptocurrencyhe's a risk taker. He links the future demand in co-working spaces to the country's young workforce
When nobody believed in the concept of shared office spaces and bitcoins, 25-year-old Karan Virwani, son of Bengaluru-based real estate developer Jitendra Virwani, who, according to Forbes Rich List 2016, has a net worth of $2.2 billion (around Rs14,080 crore), had a different take.
In August, Japan’s SoftBank invested $4.4 billion in WeWork, a US-based shared-workspace company that is promoted by Virwani in India. In the same month, bitcoin, a cryptocurrency, crossed $4,000 for the first time to touch an all-time high—Virwani is a bitcoin investor. You can call him the poster boy of the next generation who could connect an emerging business idea and an emergency currency to his investment portfolio. The older of the two siblings, Virwani clearly has a big appetite for risk.
Though his father is the biggest real estate developer in Bengaluru, Virwani decided to form a new joint venture in India with WeWork. The US-based company caters to about 150,000 members in co-working spaces across 15 countries. Considering he is the heir to the real-estate company Embassy Group, which has developed 40 million sq. ft of commercial, residential, retail, hospitality and industrial warehouse spaces, he had often thought of starting a co-working space on his own. “My father insisted that we should do it on our own, and that there is no need for WeWork. But I convinced him finally," says Virwani.
Why did he opt for a joint venture with WeWork? “It all started when I was in college. I was interested in investing in smaller businesses. I used to watch a couple of shows focused on entrepreneurship on TV. The idea really sprouted when I spent two years (2013-14) working in the family business, along with my father, in the Embassy Group. When I was training and shadowing him, and understanding the business, I started to see there was a real gap in providing quality space for smaller companies and smaller businesses in India," says Virwani.
In India, usually smaller companies and start-ups are seen working out of small apartments and coffee shops. “We were building and leasing out space to large companies with nice tech parks, food courts and buildings with all kinds of facilities. I wanted to do something for the smaller companies. During our research, we came across WeWork. And it took off from there." He says he chose the company because of its design, concept and business model. “I was bullish that we have to do a partnership with WeWork even if it cost extra."
In India, if you look at the demographic, we have about 800-900 million people below the age of 35. In the next 15-20 years, there is going to be this large influx of a young workforce and they won’t want to work in a traditional environment.-
Virwani believes that the shared office space concept will have massive demand in future. “Initially, WeWork started off for creative and smaller companies. Now even large companies such as Microsoft, HSBC and IBM are considering shared office space," says Virwani. He links the future demand to the country’s demography. “In India, if you look at the demographic, we have about 800-900 million people below the age of 35. In the next 15-20 years, there is going to be this large influx of a young workforce and they won’t want to work in a traditional environment," says Virwani. “I believe there will be a rise in gig economy and digital nomads."
In India, WeWork plans to have 10,000 members across Mumbai and Bengaluru by December and open in six more locations by January. The company is looking to expand in Hyderabad, Chennai and Pune and later enter Ahmedabad, Indore and Bhopal.
How does real estate work for WeWork? “We are not tied to any developer or partnership. We don’t have any exclusive partnership across the country. We rent space just like any other tenant. We are trying to do management deals, straight leases or rent-share deals, which we haven’t done in India yet."
Virwani is currently focused on WeWork and runs it as a separate entity from Embassy Group. However, he keeps tabs on his family business too. “I am in touch with what is happening in each vertical. I have help set up the hospitality vertical in Embassy that takes care of some of these luxury club houses, the F&B arm and managing food courts within tech parks. That part of the business I still look at. Apart from that, it is just general strategy about what is happening in commercial business. I am away from any serious hands-on involvement. My brother (Aditya) is in training and he is working with my dad, so they are managing that part of the business."
Though WeWork takes up a large part of Virwani’s day, he finds time to hit the gym early in the morning, play with his dog in the evening and watch TV. He also finds time to take care of his personal finance. “Mostly, I take care of my personal finances. However, I haven’t been at the best of it because of lack of time and focus right now. We manage things from the family side. Luckily, I have generated enough to be able to play with. That is my personal thing which my family doesn’t get involved with."
Virwani is a risk-taker when it comes to investments. “I invest in equity. I have started in a very small way—just playing with it. I do invest in mutual funds, but it is really non-interesting to me. The banker is trying to show me 6% return, which is nothing. My brother and I have an interest in cryptocurrency. I bought a bitcoin when I was in the university when it was £60 (around Rs5,000). Now it is $3,000. Technology, in general, is very interesting to me. I am a geek that way. I am always watching it. I kind of know the price of bitcoin and ethereum. I keep checking it every two days. I hold a little bit (of cryptocurrency)." He also has an interest in start-ups. “It excites me. I haven’t made investments in start-ups yet. I have my own start-up—a food delivery start-up, Entrée. But I haven’t invested in anything external yet."
He collects artwork, a trait he gets from his mother, who is an art fanatic, he says. “I do have a really nice painting—two of them. It is street art by (Los Angeles-based) Mr Brainwash." How does he pick art? “One, I need to like it. My taste in art is young. It is not really traditional art. I look at more street artsy, very quirky and unique stuff. I like a lot of murals and street artists." You will see him driving an Audi on regular days, but “on a holiday I would like to drive something nice (such as a Ferrari)." His holidays include a lot of food and adventure sports. “The last adventure trip was a trek to the Himalayas. We also went to Prague recently for skydiving." He has already decided what he wants to do next. “Cooking is something I want to learn. I want to do some kind of a professional course even if it is for a couple of weeks. I would also love to learn how to (be a) DJ. Those are the two things."
Name: Karan Virwani
Designation: Owner-promoter-director at WeWork (India)
Education: Bachelor’s in business administration, University of Kent
What is your money mantra?
I am not a conservative investor. I have invested in equity. I have started in a very small way—just playing with it. I do invest in mutual funds but it is really non-interesting to me. My brother and I have an interest in cryptocurrency.
Name: Jitendra Virwani
Net worth: $2.2 billion
Source of wealth: Real estate
Education: Bachelor of arts/ science, Bangalore University
Brief: Jitendra Virwani’s Embassy Group is Bengaluru’s biggest developer of sprawling office parks with partners such as private equity firms Blackstone and Warburg Pincus. Embassy has a roster of multinational clients, such as Wells Fargo, Yahoo and Burberry, as well as home-grown e-retailer Flipkart. The developer’s forthcoming project in its home city is Embassy Springs, a 300-acre township near the airport. Next up is a REIT listing of Embassy’s office assets. Passionate about horses, Virwani owns a riding school.
Source: Forbes Rich List
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