WeWork, the US-based company that leases office space to everyone from freelancers to large enterprises, is currently privately valued at a staggering $47 billion.
That figure, unsurprisingly, has raised some eyebrows, as have WeWork’s claims of being a “tech company” rather than a real estate company.
While WeWork does boast impressive growth figures (86% year-on-year) and revenues of $1.8 billion, it’s still managed to rack up loses of $1.6 billion. It’s to be expected that rapid growth will come at a cost, but even so a valuation set at 26x its revenue is still outrageous, as 2020 presidential hopeful Andrew Yang points out on Twitter:
“For what it’s worth I agree with @profgalloway that WeWork’s valuation is utterly ridiculous,” he said. “If they are a tech company so is UPS. UPS trades for 1.4x revenue not 26x.”
In NYU Professor Scott Galloway’s original Business Insider piece, he states “any equity analyst who endorses this stock above a $10 billion valuation is lying, stupid, or both.”
Revenues are expected to grow to $3 billion this year and there are rumours the company will be filing for an IPO in the near future, although that prompt a rapid reduction in its sky high valuation.