We will focus on enterprise clients, profitability: WeWork India CEO
'We are in the process launching an on-demand product for large companies, where even remote workers can access space and are charged by the hour'
In the past few months, New York-based co-working startup WeWork, under its new CEO Sandeep Mathrani, has trimmed its workforce, reduced cash burn, cut costs and is still aiming to turn profitable next year.
Indian affiliate WeWork India is also following a similar strategy and adapting them to meet the flexible workplace demand led by large enterprise clients as well as planning to turn profitable despite the disruption caused by the pandemic. In an interview, WeWork India CEO Karan Virwani spoke about the recent fund allocation by its parent, newer products and business strategy. Edited excerpts:
How is the recent $100 million allocation by WeWork Global being utilised?
The fund allocation has been used to pay off our vendors and give them liquidity. We have a few enterprise deals signed that we need to deliver and some of the money will be used as capex. The rest of the money is kept to maintain a healthy liquid position in the current situation.
Under the new CEO, is there a new mandate for WeWork India?
Earlier, we had targets and we were chasing growth. Having scaled the business in India, we know how to run it and are investing our capital. There is no new mandate but we are on the same page. We even got to proftability in January-February this year at the Ebitda level and we were covering our corporate costs. With the pandemic, we have now moved back six months but we are still looking to turn profitable.
What’s the extent of disruption in business caused by the pandemic?
WeWork India has 34 centres with 60,000 desks across multiple cities. Physical occupancy in the centres is still at only 10-12%, as people continue to work from home. New sales or leases are at 50% to pre-covid levels and revenue is down 20% since March. People are slowly coming back to workplaces. The key challenge is really the uncertainty over when things will pick up. Three months back, it looked like it will get normal in a few months and we were coming out of this but now, it looks further stretched.
Is WeWork signing new leases? Is expansion on hold?
Leasing is happening and the momentum in Bengaluru is strong. Many companies want ready- to-move-in space and are signing deals for a 12 months to three year period.
Large enterprises continue to sign new lease deals for space in Bengaluru and Mumbai. We recently signed a deal in Gurugram for 300 desks. The need for flexibility is key right now.
At Embassy Manyata Business Park in Bengaluru, we have 2 lakh sq ft of space, nearly 3200 desks, coming up. We have signed a few others deals with Netflix and Bytedance in Mumbai.
Any new offering for users from WeWork India?
We are in the process launching an on-demand product for large companies, where even remote workers can access space and are charged by the hour. It’s like an Uber-like equivalent for co-working space, where anyone can book a slot on our app and any individual can use it
This is a bit different from our member-only, monthly model that. Even if you book a hot desk for an hour or two in any of our centres, you get access to all the facilities. This will be useful given employees of many companies may continue to work from home and need a workplace only intermittently.
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