I’m fascinated by WeWork. This innovative, shared-office provider is the latest poster child for companies that are disrupting established industries. Think of it as the Uber, Airbnb or Spotify of workspace.
Equally dizzying, however, is the company’s valuation, which has risen with each round of private financing. The last share purchase by Son’s Vision Fund valued the company, which didn’t exist a decade ago, at US$47 billion.I’m writing about WeWork now because the rocket ride has come to an abrupt halt. The company was set to go public, with its shares expected to begin trading this month. But this week, the initial public offering was withdrawn.
“As we build and open more locations within existing markets, expand to new markets and scale our suite of products and services, we increase the value of our platform to our members and create additional capacity for incremental monetization of our platform,” the prospectus reads. Ideally, companies ride the wave to a place where they’re profitable and no longer require outside capital. Unfortunately, they don’t always get there.WeWork may prove to be a live example of what happens when the tap turns off before the company is self-sustaining. Without new equity from the IPO , the company will need to raise money elsewhere or quickly rein in its sizeable losses.