WeWork CEO Adam Neumann reveals details about the company rebrand and disappointing SoftBank investment news.
Today (8 January), WeWork CEO Adam Neumann told Fast Company that the company was rebranding to ‘The We Company’.
This major alteration comes a day after the news that an investment from Japanese giant SoftBank dropped from a projected $16bn to just $2bn. The original investment would have given the Japanese conglomerate a majority stake in the co-working firm.
Market conflicts at the end of 2018 mean SoftBank’s stock has been down 20pc since the end of November. Neumann and SoftBank CEO Masayoshi Son negotiated a revised $2bn deal, which now sees WeWork valued at $47bn. As of now, a total of $10bn of its valuation is directly from SoftBank.
According to a report from The Wall Street Journal, two of the key investors in SoftBank’s Vision Fund viewed WeWork as a property investment and were not keen on SoftBank making such a large play due to having prior property investments in their portfolios.
The new We Company umbrella will consist of three main business units: WeWork, its main office business; WeGrow, which includes an elementary school and a coding academy; and WeLive, a growing residential unit. The We Company also aims to add 1,000 engineers. Neumann hinted at the possibility of a banking unit in future.
WeWork continues to expand
In December of last year, a Bloomberg report detailed growing wariness about WeWork among property brokers such as Blackstone Group and Tishman Speyer. The company has more than 300 locations in 83 cities as of the third quarter of 2018 and claims to be the largest office user in London, Washington DC and Manhattan. It revealed its sixth Dublin location last November.
When asked about the danger that a potential downturn could pose, Neumann said: “For me, a downturn is not scary. It’s an opportunity.”
The We Company now has a cool $7bn in cash on hand and can expect a second cash infusion worth $1.5bn from SoftBank in 2020.