Investors betting on WeWork’s second act just got a wake-up call.
The co-working company lost $3.2 billion last year as the Covid-19 health crisis slashed the demand for flexible office spaces, the Financial Times reported, citing documents shown to possible investors.
The pandemic caused WeWork’s occupancy rates to fall 47 percent in 2020, down from 72 percent at the beginning of the year, according to the documents reviewed by the publication. Its losses shrunk from $3.5 billion in 2019 as the firm reduced capital expenditure from $2.2 billion in 2019 to $49 million in 2020.
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The pitch to investors — called “Project Windmill,” according to the report — comes ahead of WeWork’s possible IPO later this year. The company reportedly wants to go public via a special-purpose acquisition company, and is in talks with BowX Acquisition Corp, a blank-check firm led by Tibco founder Vivek Ranadivé that raised $420 million in August.
WeWork failed spectacularly in its last attempt to raise money on the public market, after its IPO filings revealed huge losses and millions of dollars in personal loans issued to its executives. In its latest pitch the company is touting itself as a technology platform, according to the Financial Times.
But the pitch to investors is quite ambitious: The company projects that occupancy will hit 90 percent by the end of 2022, and revenue will hit $7 billion by 2024, per the report.
[Financial Times] — Keith Larsen