WeWork IPO Filing Reveals Massive Loss Last Year

The company lost more than $1.6 billion last year on just $1.8 billion in revenue.
Lauren MuskettAugust 14, 2019
WeWork IPO Filing Reveals Massive Loss Last Year

WeWork’s parent company The We Company filed to raise $1 billion in an initial public offering on Wednesday, revealing revenues of $1.54 billion and a net loss of more than $900 million for the first six months of 2019.

The office-sharing startup reported it lost $1.8 billion last year on $1.9 billion in sales and lost $900 million in 2019 on revenues of $1.54 billion.

The company was recently valued at $47 billion after Japanese tech conglomerate SoftBank, the firm’s largest financier invested an additional $2 billion in January. Other major shareholders include Benchmark Capital and J.P. Morgan.

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The stock is expected to go public as early as September.

The company also reported it had 527,000 members as of June 30, an increase of more than 90% from the year prior. The customer base has grown by over 100% every year since 2014. The filing said it took WeWork more than seven years to achieve $1 billion of run-rate revenue, but only one additional year to reach $2 billion of run-rate revenue, and just six months to reach $3 billion of run-rate revenue.

WeWork has 528 locations, up from 485 at the end of the first quarter of 2019, and has plans to open 169 new locations. The company makes money by renting out its office space and reported $17.92 billion in long-lease obligations as of June 30.

Adam Neumann, WeWork co-founder and CEO, took no compensation in 2018, and in 2017 the company said Neumann was paid $1. Neumann, an Israeli businessman, is worth an estimated $4.1 billion.

In April, WeWork filed confidentially for an IPO. The filing did not include specific financial information, but a month later the company reported revenue had more than doubled to $728.3 million helped by expansion into international markets and growing memberships.

This spring’s offering did not move forward when SoftBank pulled back an investment, causing the company’s valuation to drop drastically.

Investors were initially skeptical of the WeWork IPO after Neumann sold shares of the company and took $700 million in loans to invest in additional real estate and other startups. But other sources viewed his borrowing against his stakes as a sign that he is confident in his company’s long-term success.

WeWork’s “space-as-service” model gave way to several other sectors beyond workspace, as skyrocketing real estate prices make it unfordable for many businesses. The company has added two offshoots: communal housing complexes with WeLive business, and early education schools called WeGrow.

The company will trade under the ticker symbol WE, but the filing did not disclose what platform it plans to trade its shares on.

The main underwriters for the IPO are J.P. Morgan Chase and Goldman Sachs.