Sum of parts: WeWork, started by Miguel McKelvey (in photo) and Adam Neumann, was valued at $20 bn, catering to entrepreneurs, freelancers, artists and small businesses .
New York-based start-up sets its eyes on the Indian market, starting with its Bengaluru facility
Flanked by retail stores, food outlets and restaurants in the heart of Bengaluru is the ‘WeWork Galaxy’ building draped in colourful glass. Inside the co-working facility, Ajay Uskanth provides leadership and life coaching lessons to his clients. A few steps away, Jeremy Oberoi, a headhunter, is busy working on recruitment projects for many firms. The facility has been set up by New York-based start-up WeWork which rents office space to workers.
Tapping such a diverse set of people like entrepreneurs, freelancers, artists for start-ups, small businesses and large companies has enabled WeWork founders Adam Neumann and Miguel McKelvey build a global company valued at about $20 billion. It provides workspace and services to more than 1.5 lakh members. It has offices in 218 locations, covering 53 cities across the world. The company entered India with the Bengaluru facility in July. “We always had India in mind, but then Adam (Neumann) came to visit here for the Startup India event last year,” said Mr.McKelvey, chief creative officer, WeWork, in an interview. “That sparked our interest to move quickly and enter the market as soon as possible.”
Co-working spaces in India are expected to grow to by 50% to touch more than one million square feet of leased ‘alternative’ workspaces by the end of the year, according to a study by premier real estate services firm JLL. The co-working segment in India is expected to receive $400 million in investments by 2018, according to JLL. It said the potential market size for this segment across the country stands in the range of 12-16 million. This includes start-up employees, professional freelancers, the staff at emerging businesses as well as large corporate office employees.
Mr. McKelvey said he and Mr. Neumann, founded WeWork in 2010 after asking themselves if there were beautiful boutique hotels and restaurants, why couldn’t the workplaces be built like them?
If you take a stroll around WeWork’s Bengaluru facility, which is akin to to a luxury shopping mall, one can find swanky cafeterias, swimming pool, gym, functional workspaces and traditional Indian paintings on walls. It is equipped to cater to 2,200 members. “This platform has allowed us to access people who we wouldn’t have been able to speak to if we weren’t working out of WeWork,” said Mr. Oberoi, who works at recruitment consultancy firm Millar Cameron.
Mr. McKelvey said the innovation WeWork is bringing to work culture is not about a different kind of office furniture systems but a framework that motivates people to come to work every day. “It is not just about you or about your individual pursuit. But now it matters whether your neighbour is successful too,” he said. Mr. McKelvey is of the view that the workplace orthodoxy in India is same as in other parts of the world, including places like New York where people still work in the ‘old-fashioned way.’ He said if companies want to hire the best talent, they have to create an environment that is supportive and make them feel good about the time they are spending at the workplace.
Some other amenities at the WeWork facility include freshly-brewed coffee, rooms for nursing mothers, meditation and social events like thought-leader panels and cheese tastings. “The support system and community are the best compared to other spaces,” said Mr. Uskanth, from the Bengaluru facility.
Mr. McKelvey, who studied architecture at the University of Oregon, founded his first venture ‘English, baby!’ an English learning and social networking website for students, almost two decades ago. He identified the need to help people learn authentic English, when he moved to Tokyo for a vacation and to understand the Japanese culture.
“The willingness and drive to achieve and succeed, I found in myself was unlimited,” said Mr. McKelvey who later created a few more ventures, including Generation Design Studio and Seven Planet, a chain of green general stores.
In 2008, Mr. Neumann and Mr. McKelvey established Green Desk, an eco-friendly co-working space in Brooklyn. They sold the business and started WeWork in 2010. WeWork, which in August disclosed receiving a massive $4.4 billion investment from Japan’s SoftBank and its $93 billion Vision Fund, is expanding in markets like India through local partnerships.
In Bengaluru, it partnered with billionaire property developer Jitu Virwani’s Embassy Group. Mr. Virwani said he realised the opportunity of renting space to workers when he visited WeWork office during a trip to the U.S with his son Karan Virwani. “My 25 steps into the WeWork office changed my mind,” said Mr. Virwani, chairman and managing director, Embassy Group. “We are going to change the office space for entrepreneurs, start-ups in India,” he said.
His son Karan Virwani, who is the director at WeWork India, said the company is planning to expand to other cities such as Hyderabad, Pune and Chennai. It is also planning to expand to smaller towns and cities in the country. In September, the firm unveiled ‘WeWork BKC’ at Bandra Kurla Complex, the commercial and financial centre of Mumbai.
The challenge ahead for WeWork would be creating a sustainable business in a market like India. Mr. McKelvey said WeWork’s business model is extremely strong as it is focused on a diverse set of opportunities ranging from freelancers, small businesses to some of the largest companies in the world. “We are well positioned no matter what the economic condition is,” said Mr. McKelvey. “In tough times, the best place to be is among the community and group of people who care about each other,” he said.