42 | FORBES ASIA OCTOBER 2017
the end of 201 5—spread across 52 cities worldwide. Its 2 ,900-plus
employees manage 10 million square feet for 15 0,000 members
who pay anywhere from $22 0 a month for the use of a common
area to $22,000 for a 5 0-person office.
“No one is investing in a co-working company worth $2 0 bil-
lion. That doesn’t exist,” Neumann says. “Our valuation and size
today are much more based on our energy and spirituality than it
is on a multiple of revenue.”
That’s most certainly true—the company is on track to do an
estimated $1. 3 billion in revenue in 2017 (with operating mar-
gins around 3 0%), giving it a price-to-sales ratio higher than what
a more conventional growth company might garner as a multi-
ple of cash flow. But this “energy and spirituality” premium seems
high no matter how you measure it. Son’s $2 0 billion valuation
translates to $ 133 , 333 per member (even though the ability to
walk away at any time is part of the model), each of whom gener-
ates $8,000 a year on average. It values each foot of space it rents
at $2,000, compared with, say, $325 to buy Class A real estate in a
tech hub like Austin.
Even before Son came along, the likes of Benchmark, Fidelity,
Goldman Sachs and JPMorgan had put $1. 55 billion into WeWork
based on the idea that traditional metrics don’t reflect its disrup-
tive model. “They create a vibrant and fun environment and fill it
with excited people to energize the work experience,” says Bench-
mark’s Bruce Dunlevie. Jamie Dimon, JPMorgan’s CEO, calls We-
Work a way of life: “They’ve built a hybrid hospitality-and-tech
company that’s entirely different from anything in real estate.”
But servicing startups will get you only so far. Their bet—and
especially Son’s—is that WeWork can change how pretty much ev-
eryone ex per i ences an office. Over the past couple years, WeWork
has signed up companies like GM, GE, Samsung, Salesforce, Bank
of America and Bacardi. Earlier this year, WeWork allotted an en-
tire building in Greenwich Village to IBM, and now big companies
generate 3 0% of monthly sales.
“It’s now a core real estate solution for our people,” says Matt
Donovan, who runs marketing for Microsoft’s Office 365 brand
and has put more than 300 employees into WeWork locales. “They
get access to different locations, plus insight and feedback from
other WeWork members who use our products.”
For growing companies WeWork offers a way to enter new cit-
ies without the hassle of scouting locations, negotiating contracts,designing the space and hiring vendors. “There is no reason to (^) WEWORK PHOTOS CLOCKWISE FROM BOTTOM LEFT: BENOIT FLORENCON; MECHI FAHS; SETH POWERS.
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