WeWork, officially known as the We Company, released documents for the IPO on Wednesday. In it, the coworking company sought to defend its massive $ 47 billion valuation, which is many times what it would be worth if viewed as a real estate company like its main competitor IWG. What makes WeWork worth more, the company seems to say, is that it is a technology company – which means that it is better than a regular real estate company through innovation and flexibility. At the same time, IWG has achieved significantly more space and more customers and, indeed, a profit , However, the market capitalization is only 8 percent of the value that WeWork considers appropriate in the last round of SoftBank financing.
The submission of WeWork shows that it has made some great progress in terms of its relative size to IWG, but that still does not explain a score that is more than ten times higher. WeWork is working with a huge loss, losing nearly $ 900 million in the first half of 201
Today's release was based on the argument that it is a technology company – and enlargement deserves its high price – very hard. WeWork used a version of the word "tech" 123 times in its public submission; That's more than the video calling software company Zoom at its stock market filing in 2019, but less than the Ride Hail app Uber, which also had arguments that it was basically a taxi company ,
"Technology is at the foundation of our global platform," states WeWork's S-1 file. "With our purpose-built technology and operational expertise, we were able to quickly scale our core WeWork Space-as-a-Service offering, improve the quality of our solutions, and lower the costs of finding, building, filling and operating our space."
It is emphasized that it employs many technicians: a total of 1,000 engineers, product designers, and machine learning scientists among the company's approximately 12,500 direct employees. However, it could be argued that most companies today are "tech companies," as most companies employ many engineers to facilitate the online movement of their business – and the economy. IWG stated that it has no relationship between technology and other employees.
Please note that WeWork also secures this point and tries to promote the human side as well. It says there are 2,500 community managers who "foster the human connection through collaboration and support our members holistically both personally and professionally", but adds: "The entire membership experience is based on technologies that enable our members to have their own space manage." Connect with each other and access products and services, all with the goal of increasing the productivity, happiness and success of our members. "
It is both human and machine.
WeWork is a technology company and continues: "[We] can provide our members with a first-class experience at a lower price compared to traditional alternatives.
This is probably the most salient part of the argument. According to WeWork, the cost per employee is nearly 60 percent lower than that of competitors thanks to the efficient use of technology. That means it can outperform its competitors cost-effectively.
At the moment, however, the company is losing money with its fist (not an unusual practice among unicorns, but not exactly a confirmation of WeWorks penny-pinching). , It was also charged with discrimination based on sex and age, as well as personal responsibility. The company, which had avoided costs and risks by leasing rather than buying real estate, actually leased real estate from WeWork CEO Adam Neumann and earned him millions. After a thorough examination, the company bought these buildings to avoid the appearance of conflict. Neumann recently paid more than $ 700 million out of a mix of stock sales and debt from the company – not a good sight for a founder trying to show others why they should buy the stock.
do not make a software company.
Despite the founder's extensive investment, WeWork has only two revenue streams: the dominant "membership and revenue service" – basically what members pay for renting their office space and extras like booking a conference room – and "Other revenue ", Which consist of sponsorship and ticket sales of WeWork brand events.
While WeWork's technical integration is invaluable to customers (and business process optimization), their main product is office space. And that is not a technological product.
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