- WeWork, the office-coworking company, received over $9 billion from SoftBank’s $100 billion “Vision Fund.”
- Across the past year, WeWork has gone from the verge of going public to barely hanging on – a notorious misstep in SoftBank’s ambitious investment portfolio.
- WeWork co-founder and former CEO, Adam Neumann, was ousted from the company as revelations about self-dealing and mismanagement helped to derail last summer’s planned IPO.
- “It’s always difficult. It’s not science, it’s art. You get excited with an entrepreneur who seems great but does not necessarily deliver a great return,” SoftBank founder and CEO Masayoshi Son, who runs the Vision Fund, said of WeWork and Neumann in a new Forbes interview.
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WeWork’s rise and fall are legendary at this point. The company went from valuations in the tens of billions to a canceled IPO in a matter of weeks.
The collapse of the office-coworking company has been especially impactful on its primary investor, SoftBank’s $100 billion “Vision Fund.” That fund – which exists to make high-risk, potentially high reward bets – is likely to lose billions on WeWork. Over $9 billion of the $100 billion war chest was pumped into WeWork.
To date, SoftBank CEO Masayoshi Son has been outwardly supportive of WeWork and its former CEO Adam Neumann. But in a new interview, Son admitted his perception of the company – and of Neumann himself – may have been off.
“You get excited with an entrepreneur who seems great but does not necessarily deliver a great return,” Son told Forbes. “We paid too much valuation for WeWork,” he said, “and we did too much believe in the entrepreneur.”
In the months since WeWork's failed IPO, the company has shed much of its previous leadership and replaced major roles.
A new CEO, Sandeep Mathrani, was put in place, and SoftBank canceled plans to pay out $3 billion to Neumann in stock.
The story of what happened with WeWork is complex and ongoing, but one particular thread stands out: cofounder and former CEO Adam Neumann's apparent repeated self-dealing while leading the company.
In the company's S-1 filing, it was revealed that Neumann owns several properties that WeWork leased from him, and that he sold the rights to the word "We" to WeWork for nearly $6 million. He has since given back the money for the naming rights and committed to giving his profits from the related real-estate deals back to the company.
Further complicating WeWork's future is the worldwide coronavirus pandemic - as fewer people work in offices, WeWork's foundational business is at risk.
SoftBank's Son, however, remains optimistic. "We're now confident that we put in new management, a new plan," he said, "and we're going to turn it around and make a decent return."