In the early days of women-focused co-working space provider, The Wing, the company was valued at approximately $365 million. However, recent reports indicate a significant drop in its valuation, now estimated at around $200 million.
The WeWork Acquisition
In January 2020, WeWork’s parent company acquired a stake in “The Wing.” This acquisition was led by investors, including the American sports and talent agency, Creative Artists Agency (CAA).
WeWork’s Real Deal
The deal between WeWork and The Wing suggested a value of approximately $200 million for The Wing, which is a substantial discount on its previous valuation. While there are sources familiar with the contract, they have requested that private information not be disclosed.
The Wing’s Value
Investors injected an additional $15 million in funding through a convertible bond, which was valued at about $265 million when the company was raising future capital. However, the estimated value of The Wing from the secondary deal, including the WeWork stake sale, now stands at around $200 million, according to some insiders.
WeWork reported a loss of nearly $17 million from its investment in The Wing. Both WeWork and The Wing declined to comment on the specifics of the deal.
Opportunities and Benefits for The Wing
Zara Rahim, Senior Director and Strategic Communications at The Wing, stated, “With WeWork, our founders were able to seize a rare and unforeseen opportunity. Increased contributions to the company, along with an injection of $15 million in extra funds, will support our expansion and scaling efforts.”
Apart from CAA, other investors who purchased WeWork’s stake in The Wing include:
- Addie Lerner – Avid Ventures
- DAG Ventures, along with the real estate finance firm DivcoWest
- Crankstart Foundation, the foundation driven by billionaire Michael Moritz and his wife, Harriet Heyman
These investors’ identities were confirmed by Rahim herself.
Notably, CAA clients, including Nicole Kidman and Meryl Streep, have made appearances on behalf of The Wing at various events.
The Wing’s Journey
Since its inception in 2016, The Wing has been dedicated to providing co-working spaces and services exclusively for women, setting itself apart from other co-working providers with male-favorable conditions. According to its website, The Wing currently operates 12 locations across the United States and London and has plans to open additional workspaces in Toronto, Seattle, and Los Angeles. In addition to traditional workspaces and conference rooms, The Wing also offers amenities such as rooms designed for pumping breast milk and a women-focused library and lecture series.
WeWork + The Wing
Jen Berrent, Chief Legal Officer at WeWork, initially expressed that the two companies would “create magic together” when WeWork first invested in The Wing back in 2017.
However, WeWork faced financial challenges, including the collapse of its IPO the previous year. To address its debt issues, WeWork began selling off assets that were not aligned with its core market.
In addition to divesting its stake in The Wing, WeWork has incurred losses from the sale of other businesses, including Managed by Q, which it sold earlier.
Currently, The Wing boasts 12,000 active members and has experienced rapid growth, reporting triple-digit annual revenue increases for the past three years, according to Rahim.
The appointment of an experienced real estate executive signals that WeWork is moving forward from the approach of its co-founder, Adam Neumann. This appointment was first reported by The Wall Street Journal.
The official announcement of this appointment is expected to be made by the company this Saturday.
FAQs
1. Why did The Wing’s valuation drop?
The Wing’s valuation dropped due to a deal between WeWork and The Wing, which suggested a reduced value of approximately $200 million, significantly lower than its previous valuation of $365 million.
2. Who are the investors that purchased WeWork’s stake in The Wing?
The investors who bought WeWork’s stake in The Wing include Creative Artists Agency (CAA), Addie Lerner of Avid Ventures, DAG Ventures, DivcoWest, and the Crankstart Foundation.
3. What unique services does The Wing offer?
The Wing provides exclusive co-working spaces and services for women. In addition to traditional workspaces, it offers amenities like rooms for pumping breast milk, a women-focused library, and lecture series.
4. How has WeWork’s financial situation affected its investments?
WeWork faced financial challenges, including the collapse of its IPO, which led to the sale of assets not aligned with its core market. This included divesting its stake in The Wing.
5. What is the current status of The Wing?
The Wing currently has 12,000 active members and has experienced rapid growth, with triple-digit annual revenue increases over the past three years.
In conclusion, WeWork’s acquisition of a stake in The Wing has resulted in a significant decrease in the latter’s valuation. This strategic move by WeWork is part of its efforts to address financial challenges and focus on its core market. Despite this, The Wing continues to expand and thrive, catering exclusively to the needs of women in the co-working space industry. The future of this partnership remains to be seen, but The Wing’s unique offerings and dedicated membership base position it well for continued success.
