WeWork, which provides office services to companies, filed for bankruptcy

WeWork, a startup that offers coworking spaces to companies, filed for bankruptcy in the United States.

When the company was founded 13 years ago, it was a pioneer in coworking space and shared office companies. However, with the pandemic and people starting to work from home, the company struggled to turn a profit as corporate companies terminated their contracts.

In the bankruptcy case it filed, the company claimed its assets and liabilities ranged from $10 billion to $50 billion.

When founder Adam Neumann first started the company, WeWork was the most valuable startup in the United States with a valuation of $47 billion.

YOU HAVE A HUGE DEBT

The company has $2.9 billion in net long-term debt and more than $13 billion in long-term lease debt as of June 2023.

Investors, including the Saudi-backed SoftBank Vision Fund, had invested in WeWork with a total valuation of up to $47 billion.

WeWork, which wanted to go public in 2019 but was unable to do so because investors were skeptical about its long- and short-term rental business model, managed to go public in 2021 at a lower valuation.

The company, which received investments from renowned companies such as SoftBank or large banks such as JPMorgan Chase, became the center of attention due to Neumann’s rapid growth strategy and his strange behavior, despite failing to make a profit.

SoftBank, the company’s largest backer, spent tens of billions of dollars to support the initiative, but the company continued to lose money. WeWork, which struggled to fill its office spaces even after the Covid-19 outbreak when offices were left unoccupied, must pay rents and debts on the buildings.