‘We will be profitable again by the end of the year’
Co-working spaces, which are hit by the pandemic, are expected to grow, thanks to demand for flexible working spaces, property experts have said. Global co-working spaces company Wework invested $100 million in its Indian unit. Though it lost 15 per cent of its clients, Wework India has signed large corporates. It expects to be profitable again by the end of the year, its chief executive officer (CEO) KARAN VIRWANI tells Raghavendra Kamath. Edited excerpts:
Can you tell us about the recent fund infusion by your parent company?
We raised $100 million from Wework Global and it picked up a 20 per cent stake. It valued us $500 million. We have enough capital to come out of this pandemic.
What has the pandemic’s impact been on profitability?
We were already profitable in the first four months of the year. But virus-related issues impacted our profitability. Smaller
members and start-ups were hit. We also saw construction delays. But we added big clients and will be profitable again by the end of the year.
For how long do you see Covid-19 impacting your business?
We have seen the situation working for us. Even as business cycles change and working styles change, Wework is here to provide flexibility. We rolled out “All Access” to users to use Wework anywhere in the world. We have also launched ‘Wework On Demand’, where anybody who wants to use our centre can sign up and show up at any place and work for half an hour, one hour and so on. Education institutions are also in talks with us to know how they can set up virtual classes. The current situation has posed challenges but it has also provided us opportunities.
How have your clients reacted ?
Hot desk and smaller members said they will come back once things get normal. Enterprise members, who account for 70 per cent of the business, are paying us but not using the centres. We have done 90 per cent collections during the lockdown. We are asking our landlords for support during the lockdown.
What kind of terminations have you seen in business?
May be 15 per cent of people left us. But we have added clients like Khaitan, Whitehat Jr. Our revenues have grown 25 per cent since the beginning of the year.
What kind of waiver have you given to your clients?
We have given relaxation to companies that found it difficult to pay but we have asked them to stay on for another six months. We have given 70 per cent discount in April, which our clients have appreciated.