The We Company, formerly known as WeWork, is weighing the prospect of an IPO, much sooner than expected, according to a report by the Financial Times. It won’t be an easy road. Economist predict a downturn in its core office-leasing business line, which has yet to turn a profit, and The We Company admitted to reduced leasing prices in all but two of its markets.
“If you look at the publicly traded office Reits, they are not trading very well . . . If you look at the share prices of Amazon and Netflix, it doesn’t seem like the best time [to float],”
Daniel Ismail, an analyst at Green Street Advisers, told the FT.
After showcasing an exceptional growth rate, the company divided its business models to three different branches now operating through WeWork, WeLive and WeGrow, which includes residential business, office space rentals and a coding academy, elementary school and gym.
In the meanwhile, the company’s IPO is estimated at around 20 billion dollars, after one of their largest investors, SoftBank reduced their estimates for the company. Still, the company is planning on issuing its IPO in 2019.
Upcoming WeWork IPO in 2019
Initially proposing 12 billion dollars in funding for the tech startup unicorn, the Japanese-based SoftBank ultimately reduced their estimates to 2 billion dollars.
However, the CEO behind the We company claims that the reduced funding won’t affect their IPO as the company is said to have collected 2.5 billion in revenues during the course of a single year, with plenty of cash to work with.
The last funding the company had was around two months ago, while the company managed to raised over 13 billion dollars in total through private investors over the course of the last several years.
Besides from raising 10 billion dollars from SoftBank, the company was funded by more than several private investors, which includes JP Morgan & Chase, as well as Goldman Sachs, presently estimated at 20 billion dollars in comparison to the previous value of 47 billion dollars.
Even with the reduction on the side of the Japanese bank, WeWork appears to be in for a successful IPO round, once the company goes public.
For now, the exact date as well as the share price are yet to be revealed.
What is WeWork?
The New-York based coworking startup WeWork has already disrupted the way many people live, work and exercise since it launched in 2010.
The company is currently valued at $20 billion with even bigger expansion plans for the year ahead. Earlier this week, it announced plans to dabble in education with the opening of its first elementary school called WeGrow in the fall. The new initiative will focus on “conscious entrepreneurship.”
The office-sharing giant is also expanding its workforce and real estate properties. Earlier this month, it announced plans to open up a second headquarters in San Francisco’s new Salesforce Tower that will house an additional 250 employees, 100 of them expected to be engineers. A few weeks later, the company purchased the iconic Lord & Taylor building on Fifth Avenue in Midtown Manhattan from the Hudson’s Bay Company for $850 million with plans to rent out the bottom floors to startups and serve as WeWork’s new New York headquarters.
The expansion news comes fresh off a monster $4 billion cash injection from Japanese conglomerate SoftBank in recent weeks.
While the company isn’t new, a lot of people are still unfamiliar with how ‘coworking’ actually works.
Here’s an in-depth look at WeWork.
What is WeWork?
It provides shared workspaces for startups, small businesses, freelancers and entrepreneurs, managing over 10 million square feet of office space around the world. The idea allows various entrepreneurs to share a space and office services to eliminate added costs. The company’s 100,000 plus members have access to health insurance, an internal social network, social events and workshops, as well as an annual summer retreat.
WeWork has more than 2,000 employees with locations in 23 cities across the U.S., as well as 19 countries. Some of them: WeWork Chelsea, WeWork Barton Springs, WeWork Tysons, WeWork Tampa, WeWork Boston, WeWork Oakland, WeWork South Williamsburg, WeWork San Francisco, WeWork Los Angeles, WeWork Chicago…
WeWork investors include SoftBank, JPMorgan Chase & Co (NYSE:JPM), T. Rowe Price Associates, Wellington Management, Goldman Sachs Group (NYSE:GS), the Harvard Corp, Benchmark and Mortimer Zuckerman, the former CEO of Boston Properties.
WeWork’s enterprise partners include Microsoft (NASDAQ:MSFT), HSBC (NYSE:HSBC), Saleforce (NYSE:CRM), Facebook (NASDAQ:FB), Starbucks (NASDAQ:SBUX) and KPMG.
WeWork co-founders Adam Neumann and Miguel McKelvey first established GreenDesk, an “eco-friendly coworking space,” in Brooklyn in 2008. However, they later sold it in 2010 to start WeWork with its first location in New York’s SoHo district. Source: FoxBusiness
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