Fidelity Management & Research Co. and existing investors pumped $400 million into WeWork in a new fundraising round that values the shared office startup at $10 billion – twice its December valuation.
Following this latest round of funding, only three publicly traded landlords exceed the startup in size, the Wall Street Journal reported. WeWork is now worth more than half of Boston Properties, which is valued at $19 billion.
Mort Zuckerman, the chair of Boston Properties, is a backer of the startup, as are JPMorgan Chase, Harvard Management Co., Benchmark Capital and Goldman Sachs, Wellington Management and T. Rowe Price Group.
WeWork chief executive officer Adam Neumann told the Journal that he hadn’t been looking for more funding. “We didn’t seek this out,” he said, “We kept having offers and kept ignoring them.”
But, with great funding comes great responsibility.
“This is an increase in responsibility, an increase in expectations,” the 36-year-old CEO told the newspaper. “A higher valuation with more cash invested by investors just means you need to deliver higher returns.”
In December, the company’s valuation was roughly 100 times its operating income, according to the newspaper. Most traditional landlords, however, trade at about 20 times their earnings. [WSJ] — Claire Moses