WeWork’s co-founder Adam Neumann is taking a more cautious tone on the $16 billion company’s growth projections.
In an interview Monday, Neumann said he expects the co-working and co-living company to hit a run-rate revenue — defined as the annualized revenue of a company if you were to extrapolate the current revenue over a year — of $1 billion in 2017, according to Reuters. In a leaked pitch deck to potential investors from October 2014, WeWork had estimated it would reach that figure in 2016 and hit $2.13 billion by the end of 2017.
A source close to the company told The Real Deal that the pitch deck was created in a “frothy” fundraising environment, that demand for WeWork’s services is strong and that Neumann’s $1 billion reference simply reflects a more conservative approach to capital expenditures.
On Monday, Bloomberg reported the company canceled advanced plans to lease 45,000 square feet in London’s Canary Wharf district.
The more cautious tone on revenue projections comes despite the fact that its membership growth looks close to projections. WeWork says it currently has 64,000 members worldwide. In the 2014 document, it had said it would hit 46,314 members by December 2015 and 98,295 members by December 2016.
In the document, WeWork based its rosy revenue and profit projections not just on membership growth, but on the expectation that it would make more money off each individual member. It projected the annual membership fee per WeWork member to rise from $578 in 2014 to $739 in 2017.