Last week,Ā GlobalData predicted SoftBankĀ would turn off WeWorkā€™s funding. Following the announcement that WeWork is taking its biggest investor to court, after SoftBank withdrew a $3bn capital injection;
Oliver Lockett, Thematic Analyst at GlobalData, a leading data and analytics company, offers his view on the companyā€™s current challenges:
Ā
"Many companies will not survive the COVID-19 shakedown. It is looking increasingly likely WeWork will be one of them.
Ā
"The lawsuit is an escalation of hostilities between WeWork and its largest shareholder. The group's occupancy rate fell from 79% in September 2019 to 64% at the start of April 2020, leaving it strapped for cash. This may only be the tip of the iceberg, as more tenants will delay payments or cancel agreements completely.
Ā
"WeWork is an archetypical hype-founded unicorn, which was once valued at $47bn. It faces the grim reality check faced by many start-ups in a trend that started before the COVID-19 pandemic struck. Venture capital is turning its back on many tech unicorns who have been founded on hype rather than a sound financial footing.ā€¯
