WeWork cofounder Adam Neumann is expected to step down as chairman of the board after giving up his CEO title in September.
WeWork's biggest investor, Softbank, is taking over the troubled company and giving Neumann $1.7 billion ($1 billion for stock Neumann will sell, a $185 million consulting fee, and $500 million in credit) to step down, according to The Wall Street Journal.
The nine-year-old co-working-space startup publicly filed for its IPO in August as part of The We Company, and has been in turmoil since. Its IPO has been shelved, and two WeWork executives — Arthur Minson and Sebastian Gunningham — took over as co-CEOs after Neumann left his CEO post.
But before its IPO plans were plagued by uncertainty and intense scrutiny, co-founder Adam Neumann opened the first WeWork space in the SoHo neighborhood of New York City in 2010. Since then, the company has rebranded as The We Company and expanded into other ventures, including co-living subsidiary WeLive and the "conscious entrepreneurial school" WeGrow, among others.
Read on for the history of WeWork leading up to its first failed IPO attempt and the controversy surrounding Neumann.
Melia Robinson originally authored this post, which has since been updated. Additional reporting by Lisa Eadicicco.
WeWork founders Adam Neumann and Miguel McKelvey met — where else? — at the office.
Neumann also had an interest in real estate — he fell in love with a vacant warehouse on Water Street while he was working in Dumbo, Brooklyn.
In 2008, Green Desk became an early incarnation of WeWork. The company offered sustainable co-working spaces featuring recycled furniture, free-trade coffee, and green office supplies.
As the economy buckled under the weight of a failing real-estate market, Green Desk thrived. Neumann hypothesized that people liked being part of a community. Some who were laid off during the financial crisis started new businesses out of Green Desk.
Something clicked for Neumann and McKelvey. They saw that it was the focus on community, not sustainability, that drove people to Green Desk. In 2010, they sold their stake and began WeWork.
The first WeWork location was just 3,000 square feet in a tenement-style building in SoHo. It had creaky floorboards and exposed brick, which the founders power-washed clean.
Early on, Neumann and McKelvey imagined office rentals as part of an ecosystem, complete with apartments, gyms, and even barber shops, that served the concept of a communal life.
They used their flagship location in Soho (which reportedly turned a profit one month after launch) to host developers and investors and grow the WeWork brand.
WeWork opened four more locations in the next two years. It caught the attention of Benchmark, a top venture capital firm that made early bets on Twitter and Uber.
WeWork opened its first international office in 2014 in London.
In an effort to diversify its revenue streams, WeWork got into residential real estate in 2016. WeLive provides fully furnished micro-apartments. People can join these communities and instantly tap into amenities like free internet, maid service, and new friends.
In 2017, WeWork announced its WeGrow endeavor, a "conscious entrepreneurial school" for children 2 to 11-years-old.
WeWork bought Lord & Taylor's flagship store building in New York City in October 2017 for $850 million.
Also in October 2017, WeWork opened its first gym. Rise by We is located at 85 Broad Street in New York City. It offers yoga, boxing classes, and a "superspa."
WeWork confidentially filed IPO paperwork in December 2018 as The We Company. Neumann announced the filing four months later in April 2019.
The We Company publicly filed its S-1 IPO paperwork in August with a $47 billion valuation.
After the filing, WeWork faced intense scrutiny of its finances and leadership from investors and the media.
WeWork delayed its IPO on September 16.
After the delay, attention shifted to the management style of Adam and Rebekah Neumann.
Neumann stepped down as WeWork's CEO on September 24.
It became clear WeWork was in financial trouble.
WeWork's biggest investor, Softbank, is now reportedly taking over the company and giving Neumann $1.7 billion to step down as chairman.