Co-working giant WeWork will swallow up 30 million square feet of New York City office space in the next five years.
Speaking at a Metropolitan Business Network event earlier this month, Adam Neumann, the entrepreneur who started WeWork in 2010, said his company will grow to occupy 80 million square feet globally by 2020. The company already has 29 locations worldwide.
“We are in a consumption phase, like nothing that has ever been seen,” said Neumann.
WeWork closed a $355 million funding round in venture capital in December and is now valued at $5 billion.
“When we started WeWork in 2010, we wanted to build more than beautiful, shared office spaces. We wanted to build a community. A place you join as an individual, ‘me’, but where you become part of a greater ‘we’. A place where we’re redefining success measured by personal fulfillment, not just the bottom line. Community is our catalyst.”
And from personal experience, you really do feel part of a community.
The very first website I ever worked rented their office space from WeWork.
The lobby in the Hollywood, CA location is bright, clean, and oddly cozy. I actually wanted to curl up on a large, brown mid-century armchair and start working right in the lobby.
But what I admired most about the space, not even knowing what I know now about it, was how the environment inspired me to actually work.
I remember it as a space filled with creative professionals, and everyone was chill. I would come into work, we would have a quiet meeting, and then I’d sit with a few other people who worked for the same website, and we’d just get cracking.
It was… easy. And, the best part — I never felt like I was at work.
There weren’t any cubicles lit with fluorescent lights. The kitchen had an awesome retro refrigerator that I could leave my lunch in, and the “office furniture” consisted of huge wooden tables where I could really spread out and work comfortably. Creatively.
And now, the New York City-based startup that rents office space to entrepreneurs across the country, has just raised a $355 million round of funding. The deal values the company at a whopping $5 billion, according to The Wall Street Journal.
WeWork’s business model, which combines real estate with technology, plays into the “sharing economy” trend that has captivated investors in recent years, thanks to hit companies like Uber and Airbnb.
Both companies infused established industries (car services and vacation rentals) with a high tech touch, and as a result, both companies have garnered valuations far beyond their established predecessors (taxi and limo services and hotels).
And so it goes with WeWork.
In addition to its massive physical footprint, which includes spaces in eight cities, across three countries, with more on the way, WeWork also recently debuted its own social network, called WeWork Commons. It’s similar to LinkedIn, in that it’s a business networking site, but it focuses on people in the earliest stages of business, offering members additional perks like access to office space, discounted services, and local events.
But WeWork’s approach is substantially riskier than Uber’s or Airbnb’s
Unlike either of those companies, which essentially act as marketplaces for independent drivers and home owners, WeWork leases all the physical space, itself, and for now, that’s working out well for the company.
Thanks to a cushy investing environment for startups, many of the entrepreneurs who occupy WeWork’s spaces are capable of raising the money to afford these high end office spaces.