It’s raining IPOs in some of India’s most exciting new-age sectors, from fintech to travel tech and foodtech to enterprise tech, and coworking startups are eager to get drenched too.

The craze to list on the Indian bourses among Indian startups working in the coworking segment is such that at least two ventures, WeWork and IndiQube, have filed their respective draft red herring prospectus (DRHPs) with the Securities and Exchange Board of India (SEBI) in the last two months.

While WeWork India’s IPO comprises only an offer for sale (OFS) of 4.37 Cr shares, IndiQube plans to raise INR 750 Cr through a fresh issue of shares and INR 100 Cr via OFS.

Notably, coworking and flexible workspaces saw a demand surge after the Covid-19 pandemic, as companies started inclining towards remote and hybrid work models and preferred to become asset-light. Amid this, the successful public listing of Awfis in 2024 acted as a major catalyst for its competitors, who were already mulling the IPO route.

Riding this wave of positive market sentiment for flexible workplaces and an expected demand surge in the coming years, at least four companies in this sector — Smartworks, DevX, WeWork, and IndiQube — are likely to get listed this year. BHIVE and Table Space are also mulling their public listings in the near to medium term.

Among these names, WeWork India, which is the leading flexible workspace provider in the country in terms of its revenue, has first-hand witnessed the consequences of failed coworking business models.

Now, before we delve deeper into understanding how WeWork India and IndiQube stack up against each other in the run-up to their respective IPOs, let’s steal a glance at WeWork’s history.

WeWork India: The Poster Boy Of Coworking

Founded by Adam Neumann and Miguel McKelvey, WeWork began its operations in 2010. Backed by the likes of SoftBank Group and Goldman Sachs, “WeWork” became synonymous with the term “coworking” globally.

When WeWork India was set up in 2017, India’s coworking sector was nascent. Despite this, names like Awfis, 91Springboard, BHIVE Workspace, and IndiQube were operational in the country, and Bengaluru led the show.

The India business was set up as a joint venture between the Indian office development company Embassy Group and the US-based coworking company WeWork.

In 2019, WeWork Inc’s parent entity filed for a $1 Bn public offering with the US market regulator Securities and Exchange Commission (SEC). Soon after, financial and management troubles broiled up in the company, leading to a withdrawal of its IPO papers.

Two years later, WeWork went public through a special purpose acquisition (SPAC) merger with BowX Acquisition Corp. However, due to the Covid-19 pandemic, WeWork’s occupancy rate dropped significantly. Amid surging losses and other governance issues, it filed for bankruptcy at a US court in November 2023.

Once valued at $47 Bn, WeWork collapsed amid legal and corporate governance issues, leading to concerns about its impact on WeWork India.

However, WeWork India claimed that its business was unaffected by the US entity’s bankruptcy, as WeWork Inc. held only around 27% stake in the India business and the remaining belonged to the Embassy Group. WeWork Inc. sold its entire stake in the India business last year.

Currently, 1 Ariel Way Tenant Limited holds a 22.72% stake (3.14 Cr shares) in WeWork India, while Embassy Group owns the remaining 73.82% stake (10.21 Cr shares).

As part of the OFS, Embassy is offloading 3.34 Cr shares in the company while 1 Ariel Way is also partially selling its stake (1.03 Cr).

While WeWork India’s top line growth has been promising in the past few years despite the ongoing legal tussles at WeWork Inc., the former’s path to getting listed on the Indian bourses might........

© Inc42