Sun. Aug 25th, 2019

WeWork just filed to go public — Check out the company’s journey from one SoHo building to a $47 billion valuation


WeWork just filed to go public — Check out the company’s journey from one SoHo building to a $47 billion valuation

WeWork, the nine-year-old co-working space startup, just filed for its IPO as part of The We Company, its parent company last valued at $47 billion.

Founder and CEO Adam Neumann opened the first WeWork space in the SoHo neighborhood of New York City in 2010. Since then, the company has re-branded as The We Company and expanded into other ventures, including co-living subsidiary WeLive and the “conscious entrepreneurial school” WeGrow, among others.

Read on for the history of WeWork leading up to its highly anticipated IPO.

Melia Robinson originally authored this post, which has since been updated.

WeWork founders Adam Neumann and Miguel McKelvey met — where else? — at the office.

Neumann came to New York City in 2001, fresh off his service in the Israeli military. He started a company called Krawlers, which sold clothes with padded knees for crawling babies.

“We were working in the same building as my co-founder Miguel McKelvey, a lead architect at a small firm,” Neumann told Business Insider’s Maya Kosoff in 2015.

“At the time, I was misguided and putting my energy into all the wrong places,” he added.

Source: Business Insider

Neumann also had an interest in real estate — he fell in love with a vacant warehouse on Water Street while he was working in Dumbo, Brooklyn.

In an interview with Fast Company, Neumann recalled approaching the landlord and asking for the building. The landlord said, “You’re in baby clothes. What do you know about real estate?”

Neumann said he shot right back: “Your building is empty. What do you know about real estate?”

He and his new friend McKelvey struck a deal to start a real-estate business there: Green Desk, which still exists today.


Source: Fast Company

In 2008, Green Desk became an early incarnation of WeWork. The company offered sustainable co-working spaces featuring recycled furniture, free-trade coffee, and green office supplies.

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Customers, called “members,” could rent a desk or a private office month to month. Neumann and McKelvey made money by charging more for those spaces than their lease payments.

Green Desk offered most things individuals and small companies needed: fully furnished offices, conference rooms, high-speed internet access, utilities, printing, and a stocked kitchen.

Source: Dumbo NYC, Forbes

As the economy buckled under the weight of a failing real-estate market, Green Desk thrived. Neumann hypothesized that people liked being part of a community. Some who were laid off during the financial crisis started new businesses out of Green Desk.

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Source: Fast Company

Something clicked for Neumann and McKelvey. They saw that it was the focus on community, not sustainability, that drove people to Green Desk. In 2010, they sold their stake and began WeWork.

Neumann and McKelvey had $300,000 between them, low credit scores, and no building. Still, they convinced a landlord to rent them one floor of a building on a trial basis.


Source: Forbes

The first WeWork location was just 3,000 square feet in a tenement-style building in SoHo. It had creaky floorboards and exposed brick, which the founders power-washed clean.

Source: Forbes

Early on, Neumann and McKelvey imagined office rentals as part of an ecosystem, complete with apartments, gyms, and even barber shops, that served the concept of a communal life.

“It was always thought of, ‘How can we support this person who wants to live more collectively, live lighter — who wants to have less stuff, who wants to pursue their passion, pursue a life of meaning, rather than looking for just material success?'” McKelvey told Business Insider.


Source: Business Insider

They used their flagship location in Soho (which reportedly turned a profit one month after launch) to host developers and investors and grow the WeWork brand.

Source: Forbes

WeWork opened four more locations in the next two years. It caught the attention of Benchmark, a top venture capital firm that made early bets on Twitter and Uber.

Benchmark led a Series A funding round of $17 million, pushing WeWork further into growth mode. WeWork shot up to 1.5 million square feet of space and 10,000 members by 2014.

As even more venture funding flowed in, the number of WeWork locations skyrocketed.

Source: Business Insider, Forbes

WeWork opened its first international office in 2014 in London.

Source: Built In NYC

In an effort to diversify its revenue streams, WeWork got into residential real estate in 2016. WeLive provides fully furnished micro-apartments. People can join these communities and instantly tap into amenities like free internet, maid service, and new friends.

“In the big picture, we see WeLive as a huge opportunity, as big as WeWork, for sure,” McKelvey told Business Insider. “I think we’re lucky to have a good foundation in place where people trust us and are interested in the product.”


Source: Business Insider

In 2017, WeWork announced its WeGrow endeavor, a “conscious entrepreneurial school” for children 2 to 11-years-old.

Sources: WeGrow, Business Insider, Business Insider

WeWork bought Lord & Taylor’s flagship store building in New York City in October 2017 for $850 million.

Sources: Business Insider, WeWork

Also in October 2017, WeWork opened its first gym. Rise by We is located at 85 Broad Street in New York City. It offers yoga, boxing classes, and a “superspa.”

Source: Business Insider, Business Insider

WeWork confidentially filed IPO paperwork in December 2018 as The We Company. Neumann announced the filing four months later in April 2019.

Source: Business Insider

With a $47 billion valuation, The We Company publicly filed its S-1 IPO paperwork on Wednesday.

The filing provides the first in-depth look at WeWork’s financial results. The document shows spiraling losses over the last 3 years, with the firm posting a loss of $1.6 billion 2018 on revenue of $1.8 billion.

It also reveals that CEO Adam Neumann volunteered to forgo a salary for 2018.


Source: Business Insider


WeWork declined to comment for this article.

Read more: WeWork isn’t even close to being profitable — it loses $219,000 every hour of every day

Read more: WeWork is about to publicly file its IPO paperwork — here’s how its CEO, Adam Neumann, spends his billions