At one point WeWork was a near-invincible unicorn with a larger-than-life-co-founder as chief executive. Now, in a reversal of fortune, the company has filed for bankruptcy. Let’s take a look at why is WeWork not working now.

What is WeWork? WeWork is a tech company that operates rent-based shared workspaces in metropolitan areas across the globe. In a nutshell, it is a company that leases long-term office space in order to rent it to others in the short term.

What went wrong? WeWork began to crumble in 2019, when the company began an IPO. WeWork losses were revealed during IPO filing. Before the IPO began, WeWork was valued at $47 billion, but once proper attention was paid to their financials, it was discovered that WeWork was bleeding cash and the company was actually only worth $10 billion.

As the fantasy of WeWork began to unravel, investors grew disillusioned with the company's business model and controversial governance. Questions were raised on its work culture and CEO Adam Neumann's over- the-top work style. He went from charismatic to controversial over a really short period of time. Several lawsuits were filed against the company including race and gender discrimination and sexual harassment.

Fall of an icon | Adam Neumann was known for his signature look of long unkempt hair and for walking around the office barefoot. SoftBank CEO Masayoshi Son reportedly compared Neumann to Alibaba's founder Jack Ma. As scrutiny of WeWork's financials began many of Neumann's self-dealings were revealed.

In WeWork, Neumann had more control than other shareholders. If he died, his wife Rebekah would choose the next leader, as stated in company documents. Neumann's strong position allowed him to use unconventional financial practices, seen by many as a conflict of interest. The Wall Street Journal revealed Neumann was buying property privately, leasing it to WeWork, and simultaneously borrowing money from WeWork at low or no interest. WeWork paid Neumann almost $6 million to change its name to "The We Company," a trademark owned by Neumann.

A timeline of the rise and fall of WeWork | Founded in 2010 in New York City by Israeli-born Andy Neumann, his wife Rebekah Paltrow Neumann, and American-born Miguel McKelvey, WeWork had its humble beginnings. WeWork's inaugural shared office space in Manhattan's SoHo district opened its doors in April 2011. The company's growth trajectory gained momentum as it secured $17 million in Series A funding in April 2012.

In February 2013, the company secured $40 million in Series B funding, marking the start of its rapid expansion. During this period, WeWork inked numerous lease agreements to grow its presence. By November 2013, it achieved unicorn status, boasting a valuation of $1.6 billion after a successful $157 million Series C funding round. Between January 2015 and December 2016, as part of a global expansion, WeWork's office locations grew from 65 to 110, and its member count surged from 16,000 to 80,000. In August 2017, SoftBank made its first investment in WeWork, injecting $4.4 billion into the company. Eventually, SoftBank's total investments reached approximately $17 billion, elevating WeWork's valuation to $20 billion.

In January 2019, WeWork, valued at $47 billion, underwent a rebranding to become 'The We Company.' This transition coincided with the company's expansion, spreading its footprint to 425 locations across 100 cities in 27 countries and a community of nearly 600,000 members. However, in August 2019, when the company unveiled its IPO prospectus, a series of challenges emerged. By September 2019, Andy Neumann resigned as CEO, leading to the appointment of Artie Minson and Sebastian Gunningham as co-CEOs. Shortly thereafter, the company initiated significant workforce reductions.

In February 2020, Sandeep Mathrani assumed the role of CEO, and by October 2021, 'The We Company' transitioned back to WeWork. As of April 12, 2023, the company's valuation dipped to $380 million. Mathrani resigned in May 2023, and on August 8, 2023, the company's Q2 financial statement unveiled losses totaling $696 million over six months. Finally, on November 6, 2023, WeWork filed for bankruptcy.