Founded in 2010, WeWork designs and builds both physical and virtual shared spaces and offices, and opened its first location in New York City.
Now, WeWork offers over 850 locations in more than 150 cities worldwide. It works with people from freelancers to Fortune 500 companies. Some of its customers include Microsoft, Zoom, and Pfizer.
The company claims the COVID-19 pandemic accelerated demand for flexible workspace options and believes it’s in a unique position to capture that market.
But investors are skeptical about the WeWork IPO after its failure in 2019, which has had the company in turmoil ever since.
But WeWork is back in the IPO game, this time by route of SPAC.
The company initially filed for an IPO in August 2019, after the filing, WeWork faced intense scrutiny of its finances and leadership.
WeWork CEO and co-founder Adam Neumann was criticized for some personal antics and after the company was taken over by investor Softbank, stepped down with a $1.7 billion deal from Softbank.
Then in November of 2019, the company confirmed it laid off 2,400 employees and cut its valuation down to $10 billion from $47 billion.
Then, again, the company’s valuation was cut to $5 billion and more layoffs were announced.
Needless to say, WeWork’s first attempt was unsuccessful, and the company pulled the plug on a public offering.
Fast forward to 2021, and WeWork is back in the game, this time though with SPACs backing the offer.
The company has agreed to merge with the BowX acquisition corp in a deal valuing it at $9 billion.
The new valuation is less than a quarter of the $47 billion valuation WeWork reached in 2019.
The BowX sponsor is Bow Capital Management, run by Vivek Ranadive, who also owns the Sacramento Kings, and has Shaquille O’Neal as an advisor.
The SPAC has raised more than $420 million last year.
The transaction would be funded with BowX’s cash in trust as well as $800 million in private investment from groups including Insight partners, Starwood Capital Group, Fidelity Management, Centaurus Capital, and funds and accounts managed by BlackRock.