WeWork raised $12.8B, hit $47B — then the IPO failed and the company collapsed

WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey, opening its first coworking space in SoHo, Manhattan in April 2011. The company signed long-term leases on office space, renovated it, and rented it out on short-term contracts. SoftBank became the primary investor: $4.4 billion from the Vision Fund in 2017 at a ~$20 billion valuation, and another $2 billion in January 2019 at a $47 billion valuation. By 2019, WeWork had raised $12.8 billion and was the most valuable startup in the United States.

On August 14, 2019, WeWork filed its S-1. The filing revealed losses of billion in 2018 and a critical mismatch: 7 billion in future lease obligations vs billion in future lease commitments. It also exposed CEO Adam Neumann's self-dealing: he had cashed out 00 million via stock sales and loans, and owned the building at WeWork's first location. The IPO was withdrawn on September 17, 2019. Neumann resigned as CEO on September 24, receiving .7 billion from SoftBank to exit. SoftBank wrote down .2 billion of its investment in November.

Sandeep Mathrani was named CEO in February 2020. WeWork went public in October 2021 via a $9 billion SPAC merger. But the business model remained broken: by mid-2023 the company spent over 80% of its revenue on rent, paying over $2.7 billion a year. It filed for Chapter 11 bankruptcy on November 6, 2023, listing $10 billion to $50 billion in liabilities. WeWork emerged from bankruptcy in May 2024 with Yardi Systems owning 60% and SoftBank retaining 20%. It reached break-even EBITDA in Q4 2024 but was still not profitable.