WeWork Files for IPO, Reveals Revenue and Losses
NEW YORK CITY — WeWork’s parent company, The We Co., has filed for its initial public offering. The coworking giant has not yet provided details on the number of shares it will offer or the expected pricing.
We’s public filing would enable the company to debut as early as September. We has been valued as high as $47 billion in the private markets, according to The Wall Street Journal.
We’s total revenue increased $771.6 million in the first six months of 2019 to $1.5 billion, primarily driven by an increase in membership and service revenue, according to the company’s filing with the Securities and Exchange Commission. On the flip side, We posted a net loss of $689.7 million for the first six months of the year. Total revenue in 2018 was $1.8 billion, but total losses were $1.6 billion.
In the filing, We stated that average revenue per WeWork membership has experienced a decline, citing continued expansion into new global markets with different pricing structures and discounts to encourage longer contract terms.
In 2010, WeWork opened its first location at 154 Grand St. in New York City. In the early years, WeWork members consisted of mostly freelancers, start-ups and small businesses. Now, the company operates more than 528 locations in 111 cities across 29 countries. Its 527,000 memberships represent global enterprises across multiple industries, including 38 percent of the Global Fortune 500.
In order to keep up with the expansion, WeWork has needed to raise increasingly large sums of money. Total location operating expenses increased $597 million to $1.2 billion in the first six months of 2019 due to the overall growth of the company’s global platform and the increase in the number of open locations. Location operating expenses account for 80 percent of total revenue. Not surprisingly, WeWork’s most significant location operating expense is lease cost.
WeWork offers different tiers of monthly membership, including hot desks, dedicated desks and private offices.
This week, WeWork leased nearly 90,000 square feet at 1155 W. Fulton St. in Chicago, representing all of the available office space in the building. The location serves as WeWork’s 13th space in Chicago. Other lease signings announced this summer include a 56,000-square-foot space in downtown Houston and a four-floor lease at Southeast Financial Center, Miami’s tallest office building.
WeWork’s announcement for its IPO comes at a time when coworking is poised to overtake tech as the top office leasing sector in 2019, according to JLL. Both tech and coworking have exceeded the 10 million-square-foot mark halfway through the year.
JP Morgan, Goldman Sachs & Co., Bank of America Merrill Lynch, Barclays, Citigroup, Credit Suisse, HSBC, UBS Investment Bank and Wells Fargo Securities will serve as joint bookrunning managers for WeWork’s IPO. The company plans to list its shares under the symbol WE, but did not disclose the exchange where it expects to list.
— Kristin Hiller