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How was WeWork founded?
WeWork’s journey started with big dreams—and an even bigger crash.
Launched in 2010 by Adam Neumann and Miguel McKelvey, WeWork wasn’t just selling office spaces. They turned a real estate play into a movement by creating shared workspaces for freelancers, startups, and big companies.
The timing was perfect—right after the 2008 financial crisis, when commercial real estate prices had dropped by 30%, and businesses were desperate to cut costs. 💡
Their model was simple. Lease big spaces, redesign them, and sublease smaller sections at a premium. Property owners got guaranteed rent for 10-15 years, making it a win-win
This fuelled rapid growth. With backing from SoftBank and JP Morgan, WeWork raised $13B, branding itself as a tech-powered revolution.
But the company’s rapid growth wasn’t sustainable. Operational inefficiencies, poor financial management, and over-expansion lracked up $15B in losses over six years. By 2023, WeWork filed for bankruptcy.
If you are interested in uncovering business models of internet-first companies, you can check out Spotify Business Model, MakeMyTrip Business Model & other blogs here.
Journey
While WeWork’s global story turned into a disaster, WeWork India was quietly growing 🎯
But how? Karan Virwani, backed by his father Jitu Virwani of Embassy Group (with 66M+ sq.ft in assets), brought WeWork to India in 2016.
Karan saw a clear trend—India’s startup ecosystem was booming.
Startup funding surged from $5B in 2015 to $13B by 2019, driving a massive demand for flexible office spaces. Karan’s strategy? Operational efficiency and localized execution—key to outperforming WeWork globally.
By FY23, WeWork India
- Generated ₹1,300 crore in revenue
- Grew 75% YoY
- Had an occupancy rate of 81%, far above the US’s 69%.
- Present in 8 cities & 54+ locations
- Has 70K+ members
They’re also set for a major expansion—adding 21,000 desks by FY25, with a capex of ₹350-400 crore.
WeWork’s MOAT (Competitive Advantage)
1. Strong Product-Market Fit 🎯
WeWork India’s biggest moat was their location strategy.
While WeWork US expanded too quickly into unprofitable markets, WeWork India made smart, data-driven decisions. They only opened locations in Tier 1 cities like Bengaluru, Mumbai, Gurugram, and Hyderabad—areas that already had a high demand for coworking spaces.
But why does this matter?
Because 82-87% occupancy rates mean locations are consistently filled, generating steady revenue. Compare that to WeWork US, which struggled with occupancy rates as low as 72% due to expanding into immature markets.
This product-market fit is a massive moat because competitors can’t easily replicate such careful execution.
2. Asset-Light Business Model 🏢
Instead of signing risky, long-term leases like WeWork US, they opted for an “asset-light” model.
This means two things:
→ Revenue-share agreements: WeWork India splits profits with landlords instead of paying fixed rent. If a space succeeds, both parties win. If it doesn’t, the financial burden is shared.
→ Hotel operator model: In some cases, WeWork India runs the operations of a property but doesn’t take on the lease, reducing their risk even more.
It minimizes risk in an industry where fixed leases can quickly sink a business. By sharing risks with landlords, WeWork India can weather downturns (like COVID) far better than companies tied to expensive leases.
3. Brand Power & Backing by Embassy Group 🏢
WeWork India's partnership with the Embassy Group—a massive real estate player—gave them a distinct advantage from day one. Embassy's pedigree helped WeWork India secure prime real estate in key markets and attract top clients.
This matters because, real estate is all about trust, and Embassy’s reputation allowed WeWork India to partner with major developers like DLF and Prestige, securing premium properties that competitors can’t easily access.
On top of that, Embassy Group itself owns 20% of all WeWork spaces in India, providing a solid financial backbone.
4. Diversified Client Portfolio & Enterprise Focus 🏦
While coworking spaces are often associated with freelancers and startups, 70% of WeWork India’s clients are large enterprises like ICICI Bank and Grant Thornton.
But why is this important?
Big companies lease more space, stay longer, and provide stable revenue compared to individual freelancers or small teams. By shifting focus to enterprise clients, WeWork India ensures higher occupancy rates and more predictable income streams.
By the way, the depth you see here is just a feeler of the depth we teach at GrowthX 💫
GrowthX is an invite-only club of over 3000 members who are product, marketing, and business leaders, and founders from top internet-first companies like Google, Canva, CRED, Stripe, Netflix, and more 💎
We teach our members how to scale revenues via frameworks that can be applied starting next Monday morning. The GrowthX Membership is built on 3 core pillars:
1. Learning experience: Where you learn the science of revenue-led growth with frameworks actionable the next Monday morning.
2. Curated community: Where you access a safe space for you to soundboard anything that is stressing you at work.
3. Career outcomes: Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
Explore GrowthX Membership 🏆
Market Overview
The Workspace Market in India 👩🏻💻
India’s real estate sector is growing at breakneck speed, contributing 7.3% to the nation's GDP
This industry, currently valued at ₹24 lakh crore (~USD 300 billion), is expected to skyrocket to USD 1.3 trillion by 2034, and a mind-boggling USD 5.17 trillion by 2047.
While 80% of this market is residential, the commercial real estate segment owns the other 20%, which includes co-working and flexible spaces.
Commercial Real Estate & Enterprise Segment 💼
India’s commercial real estate market is projected to reach $40.71 billion by 2024 and almost triple to $106.05 billion by 2029.
With a 21.10% CAGR forecast between 2024-2029, commercial real estate is growing rapidly, driven by factors like rapid economic growth, global investments, and a post-pandemic hybrid working shift.
Bengaluru is leading the charge—this tech hub accounted for 28% of new office supply across seven major cities in 2022, with Hyderabad and Chennai close behind.
As of March 2023, flex space centres are surging: Bengaluru alone had 343 operational flex space centers, with 25,000 leased seats.
Co-Working Spaces
By 2029, the co-working office space market in India is expected to reach $2.72 billion, growing at a CAGR of 7%. In Q1 2023 alone, co-working spaces made up 27% of net office absorption in top-tier cities—double what it was pre-pandemic in 2019.
Co-working spaces offer two things: Cost efficiency & Flexibility saving businesses 12–72% on expenses compared to traditional office leases.
For startups and SMEs, it’s a no-brainer because why lock in a long-term lease when you can pay only for what you need? This model has proven invaluable to freelancers, startups, and SMEs, but it's not just them—MNCs and large enterprises are also jumping into the game.
Market Trends
1. Rising Startup Ecosystem
As of 2023, India stands as the third-largest startup ecosystem in the world with 112,718 recognized startups across 763 districts.
Startups are the biggest champions of co-working spaces, making up the lion’s share of this market with 10.3 million seats out of 12–16 million potential seats.
So what’s driving this? Flexibility, infrastructure, and community, but most importantly—cost savings. Co-working offers a plug-and-play solution where founders can focus on scaling their businesses, leaving the office management to someone else.
2. Post-Pandemic Boom
While COVID-19 disrupted traditional workspaces, it supercharged the demand for flexible office solutions.
By the end of 2023, 90% growth in net absorption of co-working spaces was recorded in major cities like Bengaluru, Delhi-NCR, and Mumbai. Companies are now opting for hybrid work models, making shared spaces more relevant than ever.
3. Tech & Innovation in Real Estate: The Future of Work 🖥️
Virtual property tours, AI-powered space management, and data analytics are transforming how tenants and landlords interact.
Startups, especially in the IT services and tech sectors, are spearheading this change, with technology companies leasing 22% of office spaces in Q1 2024.
Competitive Landscape
1. Simpliwork
Simpliwork was founded in 2018 by Kunal Walia and is a tech-enabled provider of managed flex office spaces, valued at $4.25M and made ₹377Cr in FY23
They’ve grown their portfolio to 4.2M sq. ft. of office space across 8 major Indian cities, including Delhi-NCR, Bengaluru, Pune, and Kolkata.
With the flex workspace demand booming post-pandemic, Simpliwork plans to expand to 6.5 million sq. ft. by March 2024, targeting markets like Noida, Pune, and Chennai for aggressive growth.
- They currently have 50,000 desks across India
- Plans to invest ₹750 crore for expansion and raise ₹2,800 crore through equity and debt for future growth
2. Leap Club
Founded in 2020 by Ragini Das and Anand Sinha, Leap Club is valued at $6.88M and made ₹6Cr in revenue
Leap.club is redefining the coworking space by focusing its efforts around women-led businesses and female entrepreneurs. Backed by investors like Kunal Shah and Amrish Rau, Leap Club’s goal is to expand to 100,000 members in the next two years, building a powerful network for female professionals.
- Currently at 25,000 members across 200+ cities
- Plans to work with 10-15 early-stage women-led startups in the next 12 months
They’re on a mission to address the 2% VC funding gap for female founders, and their strong community engagement is transforming professional networks for women across industries.
3. 91Springboard 🌱
Founded in 2012 by Anand Vemuri, Deepak Sharma, Pranay Gupta, Pushpendra Thakur, and Varun Chawla, 91Springboard was a pioneer in India's coworking movement.
They started with a single hub in New Delhi and has since expanded to 24 centres across 8 major cities like Bengaluru, Mumbai, and Hyderabad.
Their model focuses on creating vibrant, supportive communities of freelancers, startups, and enterprises. With 21,000+ desks in operation, 91Springboard has perfected the balance between providing workspace and fostering a collaborative ecosystem for its members.
- They’re valued at $17.8M and made ₹175Cr in revenue in FY23
- 24 centers with over 21,000 desks
- Have their presence in Bengaluru, Mumbai, Hyderabad, Delhi NCR, Pune, Noida, and Goa
The depth you see here is just a feeler of the depth we teach at GrowthX 💫
GrowthX is an invite-only club of over 3000 members who are product, marketing, and business leaders, and founders from top internet-first companies like Google, Canva, CRED, Stripe, Netflix, and more 💎
We teach our members how to scale revenues via frameworks that can be applied starting next Monday morning. The GrowthX Membership is built on 3 core pillars:
1. Learning experience: Where you learn the science of revenue-led growth with frameworks actionable the next Monday morning.
2. Curated community: Where you access a safe space for you to soundboard anything that is stressing you at work.
3. Career outcomes: Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
Explore GrowthX Membership 🏆
Market Share
WeWork, having entered the Indian market in 2017, is now commanding a significant slice of the flexible workspace market. After starting from zero, today WeWork controls 10-12% of India’s 800 million square foot organised office space market.
Among the pan-India players—those operating across multiple cities with at least 2 million square feet of space—WeWork leads with a 30-35% market share.
How does WeWork earn money?
WeWork’s revenue model is all about taking large, empty office spaces, transforming them, and leasing them out at a profit. Think of it as similar to a hotel or retail store business model. Here’s how it works in detail 👇
- Leasing big spaces in bulk: WeWork rents entire buildings or floors from landlords, often signing long-term leases. This is the "wholesale" part of the process. These spaces come as shells, meaning they are empty and unfinished.
- Adding value:
→ Once the space is leased, WeWork invests in designing and furnishing the space. This includes breaking it into smaller offices, creating shared common areas, and equipping it with modern tech, meeting rooms, and more.
→ Essentially, they turn a big, empty space into a functional office environment that caters to different businesses.
- Renting out in "retail": After transforming the space, WeWork leases out individual offices or desks to businesses, startups, and freelancers. They charge higher rates than they pay for the bulk lease, which allows them to make a profit. This model is flexible, as companies can rent spaces for shorter terms than traditional office leases.
- Additional revenue from services: Beyond just renting desks, WeWork offers extra services that generate additional income. These include things like:
- Conference room bookings for companies needing extra space occasionally.
- Parking and food & beverage (F&B) services.
- Dedicated internet connections or after-hours office usage (charged as overtime HVAC).
- These services typically add 8-10% more revenue on top of the regular leasing fees.
- Flexible membership options: WeWork also rolled out subscription-based access to common areas. This allows people to use the space for a day or a month without renting a dedicated office.
→ It’s a bit like a gym membership – you can sell more memberships than the actual number of people who will show up every day, maximizing the revenue from the same space.
→ Overall, by filling up office spaces and offering these add-on services, WeWork manages to generate solid margins of around 30-40% when occupancy rates hit 80-85%.
Cost Levers
- Leasing and Real Estate Costs: The largest chunk of costs comes from leasing expenses – paying for the spaces that WeWork rents from landlords. This includes both rent and fit out investments, which are the costs associated with furnishing and preparing the space for use.
- Employee Expenses: Like any service-driven business, WeWork’s second-largest cost is employee salaries and benefits. These include operations staff, sales teams, customer service, and other roles needed to manage the co working spaces across various locations.
- Maintenance and Repairs: Office spaces need constant upkeep. Repairing, maintaining, and cleaning spaces regularly is essential to ensure a smooth and professional environment for clients. These costs include fixing wear-and-tear, IT infrastructure upkeep, and common area maintenance (CAM) charges for shared spaces.
- IT Infrastructure and Tech: WeWork spaces are equipped with modern IT setups, including high-speed internet, secure networks, and tech-enabled facilities. Managing and upgrading this infrastructure comes with ongoing costs.
- Marketing and Advertising: To fill up spaces, especially in new locations, advertising and promotional expenses are critical. WeWork needs to invest in marketing to attract new clients, whether it’s startups or large enterprises.
- Depreciation and Amortization: Over time, the value of the company’s assets (like office furniture, tech installations, etc.) decreases. Depreciation and amortization are accounting methods to spread these costs over time.
The depreciation and interest expense made up 67% of their expenditure in FY23
Market Opportunity
1. Serving for larger Enterprises
Startups and freelancers have always been WeWork's sweet spot, but the real growth potential comes from Enterprises.
With 12.7% of India’s workforce still working from home and 28.2% on hybrid models, corporations are actively seeking flexible, cost-efficient office solutions.
Flex space demand is exploding—80 million sq. ft. by 2026 in India alone.
Currently, Bengaluru leads with 34% of this space, but it’s just the beginning. Corporates are waking up to the agility of flexible office spaces, with 56% planning to move 10% or more of their portfolios into these spaces by 2025.
With these, WeWork India has a massive opportunity to customise office solutions for large enterprises, scaling to fit their needs while boosting operational efficiency.
2. Tapping into tier-2 Cities
While metros are saturated, India’s Tier-2 cities are booming with a lot of untapped potential.
Jaipur, Indore, Kochi—these cities are no longer just small players.
→ 45% of India’s startups are coming from Tier-2 and Tier-3 cities, and these hubs are seeing white-collar job growth outpacing even metros, with 1.7 million jobs created in 2023 alone.
→ The shift to flexible workspaces is real—4x growth in these cities from 2020 to 2024.
WeWork has a nice opportunity to move early and dominate these emerging markets. With the rise of remote work, tech startups, and SME growth, WeWork can offer flexible, scalable spaces that evolve with these businesses as they grow.
3. Trying out niche workspaces
The future of work isn’t just about spaces; it’s about specialized environments & a community that solve specific problems.
Similar to leap club, Women-centric workspaces are one such niche where WeWork can lead.
With 67,499 women-led startups already in play, and women-owned businesses projected to make up 33% of all enterprises by 2030, this market is primed for tailored solutions—think daycare facilities, security, flexible contracts.
But the potential doesn’t stop there. WeWork can also create industry-specific hubs—spaces designed for FinTech, media, or healthcare. Imagine a FinTech hub where startups, investors, and large firms share more than office space—they build an ecosystem that accelerates innovation.
The depth you see here is just a feeler of the depth we teach at GrowthX 💫
GrowthX is an invite-only club of over 3000 members who are product, marketing, and business leaders, and founders from top internet-first companies like Google, Canva, CRED, Stripe, Netflix, and more 💎
We teach our members how to scale revenues via frameworks that can be applied starting next Monday morning. The GrowthX Membership is built on 3 core pillars:
1. Learning experience: Where you learn the science of revenue-led growth with frameworks actionable the next Monday morning.
2. Curated community: Where you access a safe space for you to soundboard anything that is stressing you at work.
3. Career outcomes: Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
Explore GrowthX Membership 🏆
Challenges
1. Over-Reliance on Urban Centers
WeWork India’s reliance on metro cities could hurt future growth. With 34.8 million sq ft of office space absorbed in H1 2024, competition in Tier-1 cities is heating up. Yet, new supply is shrinking—down 32% YoY—tightening vacancy rates to 15.9%.
Bengaluru, Mumbai, and Hyderabad continue to dominate, but with saturation, WeWork faces declining margins and intense competition. The challenge? Limited room for expansion unless they target emerging cities or offer unique solutions to stand out.
2. Long-Term Impact of Hybrid Work Models
Hybrid work is a double-edged sword. While it offers flexibility, it’s also reducing the need for large office spaces.
Major companies like Amazon, Wipro, and TCS are calling employees back to offices, but many workers are pushing back, favouring the work-life balance of remote setups.
Even as office absorption rises, with 60% more space leased by domestic firms in 2022-23, the shift to hybrid means long-term workspace demand could rise. WeWork needs to balance between catering to new office needs while adapting to a future where less space might be needed.
3. Economic Slowdown and Funding Problems
Startups, a core demographic for WeWork, are in survival mode.
Funding for Indian startups plummeted to $7.6 billion in the first nine months of 2024—a 17% drop YoY. Fewer deals and shrinking resources mean many will likely cut back on office space or go fully remote.
If the funding winter extends, demand for its spaces could take a serious hit, especially in tech hubs like Bengaluru, where startups are key tenants.
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