The investment would come as a primary $2 billion round, followed by a subsequent round of up to $2 billion, and could value WeWork at as much as $20 billion, reports Inc.
Founded in 2010 by Adam Neumann and Miguel McKelvey, WeWork uses a business model in which the company secures a cut-rate lease on a floor or two of an office building, parses it into smaller spaces and charges a monthly membership to startups and small companies willing to share a common work space.
— Yahoo Finance (@YahooFinance) February 27, 2017
With its first location in New York City’s Soho district, WeWork’s mission remains: To create a world where people work to make a life, not just a living. Community and services draw entrepreneurs, freelancers, startups and small businesses.
By 2014, WeWork was considered “the fastest-growing lessee of new office space in New York” and was on track to become “the fastest-growing lessee of new space in America.”
In January 2015, WeWork had 51 co-working locations across the US, Europe and Israel—twice as many as the previous year—and today, the business has more than 150 locations in 15 countries.
— WeWork (@WeWork) February 23, 2017
The company’s 30,000-plus members have access to health insurance, an internal social network, social events, workshops, and an annual summer retreat.
Media icon Mort Zuckerman asked Neumann to let him invest in the next round, and in 2015, a 200,000-square-foot WeWork became the anchor tenant of the $300 million redevelopment co-owned by Boston Properties in the Brooklyn Navy Yard. “I found it extraordinarily creative and original after being in this business for God knows how many years,” Zuckerman to in Forbes.
“WeWork plays both sides of the coin,” said James B. Lee, Jr., JPMorgan Chase vice chairman, in Forbes. “Institutions have space that young entrepreneurs could use, but they want to start their own business and cut their own trail. WeWork gives them a home and says, ‘We want you here, we will help you and build you.'”
Neumann and McKelvey grew up on a kibbutz in Oregon and credit that to their macro vision of a We Generation philosophy that has evolved to higher ambition, “Me plus We.” Neuman’s latest vision, WeLive, includes co-living residences that leverage the fundamentals of the shared economy—value over ownership.
“Just like they’re choosing Uber or Lyft rather than buying a car, or subscribing to Spotify rather than having a record collection,” reports FastCompany, consumers “will be happy to share their living space, too.”
Then innovative companies like Ooma Office cloud-based business phone services move in and make a deal with WeWork to offer members support in running their entire businesses from a co-working space. The Ooma Office app lets members access virtual fax and conferencing capabilities—one-stop shopping for start-ups.
As the space-sharing economy grows, brands like Airbnb have emerged in the real estate space. “If WeWork is the Marriott of work—it fills spaces with receptionists, refreshments, and programming the same way a hotel company designs and operates its space—then companies like LiquidSpace, PivotDesk and ShareDesk are work’s Airbnbs, offering flexible small work spaces,” notes FastCompany.
— LiquidSpace (@LiquidSpace) February 28, 2017
Competition in the space is keen and includes New Yorker’s Joshua Abram and Alan Murray’s high-end NeueHouse, a small broadcast studio for members with a café in its New York location. There are plans to open a full-service restaurant in its upcoming Los Angeles building.
Splacer, a new Brooklyn-based startup, wants to be the Airbnb of offices and stores. “Sharing spaces is the future,” said Adi Biran the company’s cofounder. “In general people are looking for something unique and different.”
— Technical.ly Bklyn (@TechnicallyBK) February 27, 2017
Splacer has 1,200-plus spaces listed and recently expanded its fourth market, bringing in Miami along with New York, Los Angeles and San Francisco. Spaces currently on the site include a Bushwick restaurant, an Industry City warehouse, a loft on the Bowery that has previously hosted photo shoots for Bergdorf Goodman and Saks Fifth Ave. and a geodesic dome in upstate New York.
— Tristen Tucker (@tristen_tucker) February 5, 2017
On the West Coast, with three Los Angeles locations, PodShare provides shared living spaces for social travelers and mobile workers. Co-founded in 2012 by entrepreneur Elvina Beck and her father as “co-living space,” beds rent for $35 to $50 a night and include 10 to 30 beds that convert to desks by day. Guests, aka, Podestrians, have a Murphy bed, napping station, Xbox 360 and 24-hour access with a keypad code. “We’re creating a social network with a physical address,” said Beck. “At check-in, we say, ‘you get your own pod, but we share everything else.
A new day, a new generation, a new economy—all bets are off and on.