Adam Neumann’s personal interests have become We Company investments: report

After We Company chief executive Adam Neumann and his wife had a difficult time selecting a school for their children, the company launched an elementary school, WeGrow.

Neumann likes surfing, and now WeWork has invested in a wave-pool company and a food line by a famous surfer. He even took a brand new $60 million jet, which the company purchased recently, to go surfing in Hawaii, according to the Wall Street Journal.

A series of investments, which appear wholly un-related to WeWork’s core product of office space, have raised eyebrows from institutional investors who say the company would be much more restricted if it were public, the newspaper reported.

“It’s concerning because you are mingling personal and company interests and that rarely turns out well,” Gene Munster, an investor at venture capitalist firm Loup Ventures, told the Journal. “Public investors—are less tolerant of this.”

The company has raised almost $10 billion, primarily from Softbank and its funds, and was most recently valued at $47 billion. The We Company declined to comment.

Among the investments the company has made that align with Neumann’s personal interests are a $32 million stake in pro surfer Laird Hamilton’s food company, Laird Superfood, and a $13.8 million, 42 percent stake in Wavegarden, a Spanish wave-pool maker — an investment that was later written off.

In WeGrow, an idea that sprung from Neumann’s wife, Rebekah, after she was dissatisfied with school offerings for their five children, the company launched the elementary school that focuses on teaching entrepreneurship to children, and costs $42,000 a year.

The firm has made mega investments in other companies that serve a more direct purpose to the company, including the purchase of marketing firm, Conductor Inc., for $126 million and Meetup for $117 million in 2017. It also led a $32 million funding round in women’s coworking firm The Wing.

But other financial plays led by Neumann, who controls the company board with a majority vote, have rankled investors. In March last year, The Real Deal reported that Neumann had quietly partnered with fashion designer Elie Tahiri to buy 88 University Place, and then went on to lease the building to WeWork — putting Neumann on both sides of the table. The Journal followed with another story recently that Neumann was the landlord in several other buildings that were being leased back to the company. [WSJ] — David Jeans