Office-sharing giant WeWork Cos. is continuing to expand, especially overseas. But its losses are growing in lockstep with its sales, the company said Monday.
At the end of last year, New York-based WeWork had more than 400,000 members worldwide paying for access to its shared or flexible office space, more than twice the number a year ago. The company said 43% of its revenue for the fourth quarter of 2018 came from outside the United States.
That international growth helped the company more than double its sales to $1.82 billion in 2018 compared with a year earlier. Over the same period, WeWork’s losses also more than doubled, to $1.93 billion.
WeWork, a private company, is not required to share financial performance details, but it has discussed select metrics several times in the last year, including its end-of-year results for 2017.
The company has sometimes timed financial discussions with announcements of fundraising deals from SoftBank Group Corp., its biggest investor, including when WeWork raised a $1-billion convertible note and a $3-billion warrant from the Japanese conglomerate.
This time, SoftBank’s role in WeWork’s story is a little more complicated. SoftBank invested $2 billion in the start-up in January. The deal valued WeWork at $47 billion, but it was a smaller investment than the possible $16-billion stake SoftBank had discussed making late last year.
WeWork President Artie Minson said the smaller deal, in addition to the billions of other recent financial commitments from SoftBank, was still a win for WeWork.
“If someone had said to me back in August, ‘Look, you’re going to raise $6 billion … and you’re going to raise it at the valuation we raised at,’ we would have all said that was a huge home run,” Minson said. “I continue to believe that transaction was a huge home run.”
The deal had its costs, however. In its financial report, WeWork detailed a $46-million expense for “transaction fees and inventory write-off,” which Minson said included fees for bankers and other costs related to the SoftBank transaction late last year. It also includes inventory for building materials that WeWork owns but no longer plans to use in construction.