The Strategist

WeWork applies for IPO

04/30/2019 - 10:12

Following technological startups going to stock exchanges, WeWork, an American coworking spaces chain, is pondering an IPO, too. In January, the company was estimated at $ 47 billion. Of all US companies that are about to hold an IPO soon, only Uber can boast a higher estimate.

We Company (until January working under the WeWork brand) submitted documents for an IPO to the US Securities Commission (SEC), The New York Times reported. The company confirmed this information and clarified that the initial application was filed back in December 2018, but now an updated document has been submitted to the SEC.

There are no details, including about exactly when it can be placed on the stock exchange, yet. Documents may be made public only a few weeks before the planned IPO, notes The Wall Street Journal. Financial Times, citing sources, writes that the IPO may take place in this year.

WeWork was founded in the United States by Adam Neumann and Miguel McKelvey in 2010. In 2018, the total number of users more than doubled and reached 401,000 people, and employment rates grew to 90%. Now the company operates in 27 countries. 

Since its inception, the company has attracted $ 8.4 billion in investment. WeWork is one of the unicorns supported by major banks and companies, including the SofBank Vision Fund, Benchmark, T. Rowe Price, Fidelity and Goldman Sachs. TechCrunch writes that Japanese SofBank was ready to acquire a controlling stake in the company for $ 16 billion, but the transaction did not take place at the last moment.

In January 2019, WeWork was valued at $ 47 billion. Among American startups planning to hold an IPO in the near future, only Uber can boast a larger estimate, writes WSJ. WeWork doubled its revenue from $ 886 million in 2017 to $ 1.8 billion in 2018, but net losses increased proportionally from $ 933 million to $ 1.9 billion. These are not the most attractive indicators for a business before an IPO, The New York Times. However, the example of Uber shows that a company can successfully go public even despite the slow growth.

WeWork is also considered one of the examples of how Silicon Valley start-ups are overestimated, TechCrunch writes. The chain essentially provides real estate services and it will have to work hard to convince investors that it can be called a stable company. Axios, in turn, writes that this will be one of the most controversial large IPOs of this year: investors will either “love” or “hate” it.