Can WeWork Continue to Grow if Its Funding Tightens?

Funding so far

With $12.8 billion in investments so far, WeWork ranks right behind JUUL in terms of unicorns with the highest amount of money raised. At a valuation of $47 billion, WeWork is now the most valued US unicorn. Uber is no longer a unicorn, as it’s now a public company. By definition, a unicorn is a private company with a valuation of over $1 billion.

There’s a catch though. Softbank, which was supposed to invest $18 billion in the startup, cut its commitment to $2 billion—a difference of $16 billion!

Can WeWork Continue to Grow if Its Funding Tightens?

Has per-member revenue peaked?

From the available data, we tried to find out whether WeWork is actually managing to cross-sell other products and services to its members. We looked at its per-member quarterly revenue data wherever it was available in the public domain. Surprisingly, we found that all its growth had been driven by its addition of new locations (and members). In fact, its revenue per member had even fallen in some quarters.

The company’s efforts to leverage its member base to provide additional services have clearly not been reflected in its revenue per user. The company has also expanded in markets where desk pricing is lower, resulting in lower revenue per member in those markets and offsetting growth in unit revenues from developed markets.

Why does it matter?

At a time when the competition is heating up in the coworking industry and WeWork’s funding is tightening after the Softbank cutback, WeWork’s getting more revenue from the same members could be a significant growth driver for it. How it will manage to do that remains to be seen.