Markets
Charted: The Rise and Fall of WeWork
Charted: The Rise and Fall of WeWork
Despite its recommitment to core business fundamentals in the last few years, WeWork’s management—which saw a shakeup in May 2023 when CEO Sandeep Mathrani departed—is setting off a signal flare about the company’s future.
“Our losses and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern.” — WeWork, SEC filing, August 8th, 2023.
But how did the once-poster child of Silicon Valley end up seeing its valuation collapse more than 99% from its peak?
Pulling together data from Business Insider, YCharts, SEC Filings, and Crunchbase we follow the rise and fall of WeWork since 2011.
The Rise of WeWork: 2010–2019
WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey with the primary objective of providing shared workspaces catered to freelancers, startups, and companies seeking “flexible office solutions.”
The business model, which rested on renting space from developers long-term, renovating and parceling the property, and subsequently leasing it out to short-term clients, thrived in a decade of low interest rates.
Its valuation surpassed $1 billion in 2014, earning the coveted “unicorn” status. In 2017, SoftBank Group made the first of its total $18.5 billion investment in the company. Two years later, WeWork hit a peak valuation of $47 billion with SoftBank’s continued investments, raising expectations for an imminent IPO.
Date | WeWork's Valuation |
---|---|
October, 2011 | n/a |
July, 2012 | $97 million |
May, 2013 | $440 million |
February, 2014 | $1.5 billion |
October, 2014 | $5.0 billion |
June, 2015 | $10.2 billion |
October, 2016 | $16.9 billion |
August, 2017 | $21.2 billion |
January, 2019 | $47.0 billion |
August, 2019 | $20-30 billion |
September, 2019 | $10-12 billion |
October, 2019 | $8.0 billion |
December, 2019 | $7.3 billion* |
March, 2020 | $2.9 billion* |
March, 2021 | $9.0 billion |
October, 2021 | $9.0 billion |
August, 2023 | $0.4 billion |
Footnote: *SoftBank valuation is based on discounted cash flow method.
The Fall of WeWork: 2019–2023
Intensive scrutiny fueled by the impending IPO raised several questions for the company. These included concerns around Neumann’s leadership style, excessive spending, creative accounting, and conflicts of interest leading to Neumann’s resignation and delay of the IPO.
In October 2019, SoftBank Group acquired 80% of the company with $5 billion of additional funding. A month later WeWork laid off 2,400 employees, nearly one-fifth of its workforce.
Real estate veteran Sandeep Mathrani was made CEO in 2020, tasked with turning the company around by eliminating recurring costs and restructuring its debt.
That same year the COVID-19 pandemic forced a significant shift to remote work, causing a decline in office space demand. WeWork’s business model, focused on shared physical spaces, faced a substantial challenge.
In 2021, WeWork went public through a SPAC merger, aiming to regain investor trust. The listing reflected a revised strategy focusing on key markets, cost optimization, and a pivot toward catering to larger corporate clients with hybrid work needs.
Over the past two years, its market capitalization as a publicly-traded company has plummeted from $9 billion to under half a billion dollars. WeWork disclosed $11.4 billion in net losses from 2020 through to June 30th, 2023 in their recent SEC filing.
What Happened to WeWork?
Aside from the trials and tribulations of former CEO Adam Neumann, the company’s sustainability itself has been questioned several times over the past decade. In 2019, the Guardian summarized the criticism succinctly by saying, the company was “renting long and subleasing short,” which left it “exposed to risk.”
Post-pandemic, the proliferation of work-from-home policies, along with the rapid rise in global interest rates in the last year—which can reduce cash flows for the commercial real estate industry—have magnified those risks.
WeWork is now battling an environment of excess supply, softer demand, increased competition and macroeconomic volatility, according to interim CEO David Tolley.
“It was foolish of me to invest in WeWork. I was wrong.” — Masayoshi Son, SoftBank Group founder.
The New York Times says that WeWork has more than 18 million square feet of rentable office space in the U.S. and Canada alone and that its failure could have a “sizable impact” on the commercial real estate industry.
At the same time, the Times notes that reporting the “substantial doubt” on continued business operations might help the company buy time with lenders to seek additional capital through issuance of debt, equity, or the sale of assets.
Markets
Which Retailers Operate in the Most Countries?
From fast-fashion giant H&M to Apple, we show the top retailers globally with the largest international presence.
The Top Retailers Operating in the Most Countries
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Today, international expansion is a key growth strategy for the world’s top retailers as companies target untapped markets with the highest potential to drive revenue and profit streams.
While traditional retailers have sought out digital strategies as the industry evolves and consumer behaviors change, physical storefronts continue to be a dominant driver of retail sales. In 2023, brick-and-mortar sales comprised 81% of retail sales globally.
This graphic shows the top retailers operating in the most markets worldwide, based on data from the National Retail Federation.
Global Retailers With the Largest International Footprint
Here are the global retailers with the widest-reaching presence around the world in 2023:
Ranking | Retailer | Number of Countries of First-Party Operation | Headquarters |
---|---|---|---|
1 | H&M | 68 | 🇸🇪 Sweden |
2 | IKEA | 51 | 🇳🇱 Netherlands |
3 | Inditex | 45 | 🇪🇸 Spain |
4 | Decathlon | 34 | 🇫🇷 France |
5 | Carrefour | 32 | 🇫🇷 France |
6 | Sephora (LVMH) | 31 | 🇫🇷 France |
7 | Schwarz Group | 30 | 🇩🇪 Germany |
8 | Fast Retailing | 27 | 🇯🇵 Japan |
9 | Euronics International | 25 | 🇳🇱 Netherlands |
10 | Apple | 25 | 🇺🇸 U.S. |
Notably, eight of the top 10 companies with the widest market reach hail from Europe.
Fast-fashion giant H&M ranks first overall, with 4,454 stores across 68 countries last year. In 2023, the Swedish company earned $21.6 billion in revenues, with its largest markets by number of store locations being the U.S., Germany, and the UK. This year, it plans to open 100 new stores in growth markets, along with shutting down 160 stores in established locations, ultimately decreasing its global store count.
In second is IKEA, with a presence in 51 countries. Last year, the company expanded its footprint in India, launching its first store in the tech hub, Hyderabad. While the company has a broad international reach, its number of storefronts is a fraction of H&M, at 477 total stores worldwide.
Looking beyond the continent, Japan’s Fast Retailing is the top retailer in Asia, operating in 27 countries globally. As the parent company to fashion brand Uniqlo, it also stands as the seventh most valuable listed firm by market capitalization in the country.
Additionally, Apple is the sole American company to make this list, with storefronts in 25 countries. Overall, the company operates four types of retail stores: regular, AppleStore+, flagships, and flagship+. Regular stores often earn $40 million annually, while flagship+ stores typically earn more than $100 million.
By 2027, the company plans to build or remodel 53 stores globally, with the majority located in the U.S. and China.
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