Flexible workspace provider WeWork India said on Tuesday it has launched an investment program for early-stage Indian startups, under which it will invest pre-seed or seed capital of up to $200,000 in selected startups.
“Investments by WeWork Labs will focus on helping early-stage startups through a blend of pre-seed capital, competitive guidance and comprehensive business support to help them scale,” the company said in a statement.
Prior to launching an investment program, WeWork Labs mainly functioned as an incubator and accelerator for over 500 startups during the last five years. Currently, 330 startups are under its acceleration programme. WeWork India’s co-investor network includes Chiratae Ventures, Waterbridge Ventures, IIFL, Huddle, AdvantEdge Founders and Lead Angels.
WeWork India, the Indian subsidiary of the US-based parent, started operations in the country in 2017 and now has about 6.5 million sq. ft of office space across New Delhi, Gurugram, Noida, Mumbai, Bengaluru, Pune and Hyderabad. It competes in a crowded coworking space market, with players such as IndiQube, Awfis, 91Springboard, CoWrks, Smartworks and more.
Recently, its parent WeWork had warned of “substantial doubt” about its ability to continue as a growing concern due to its significant losses and negative cash flows. In its latest earnings announcement, the company posted a net loss of $397 million for Q2, compared to a loss of $635 million in the year-ago period.
However, WeWork Global holds a smaller stake in its India’s operations, while the majority stake belongs to commercial realty giant Embassy Group. WeWork India management is confident that the parent’s financial troubles will not impact its business in India as it owns a smaller portion of the business, as per media reports.
In June 2020, three years after it entered the Indian market, the parent company had invested $100 million in its India operations to expand the business. As per reports, it holds a 23% stake in WeWork India.
The new programme comes on the background of a funding decline in startups in India, where investments have declined to a five-year low of $1.5 billion in the July-September quarter this year, according to data from Tracxn.