Adam Neumann wants to buy back We Work

The series We Crashed about Adam Neumann's business adventures – available on streaming platforms – could soon be forced to add a new chapter or film another season.

Oliver Thansan
Oliver Thansan
30 March 2024 Saturday 10:32
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Adam Neumann wants to buy back We Work

The series We Crashed about Adam Neumann's business adventures – available on streaming platforms – could soon be forced to add a new chapter or film another season. Because the controversial businessman is now interested in taking over the assets of We Work, a company that is now bankrupt, which he co-founded and directed for nine years and from which he was rudely fired (but with a large compensation in 2019).

Adam Neumann was born in 1979 a few kilometers from Gaza and went to a school near the strip. His parents divorced when he was seven years old. He changed addresses on many occasions, he once confessed to having lived in 13 different houses in just over ten years. Dyslexic, as a child he had a hard time learning to read. This did not prevent him from serving for five years in the Israeli army, in the Navy, where he met those he considers “my best friends.”

After finishing his military assignment, he moved to New York in 2001. He admitted that his goal was “to have a lot of fun and make large amounts of money.” When he was finishing his course at the Zickling School of Business at Baruch College, he decided to launch himself into the business world (he only managed to graduate 15 years later) and launched the first baby bodysuits with knee pads. The idea was enough for Adam to later sell the company (today the firm is called Egg Baby). He also set out to create shoes with foldable heels that had no luck.

At that moment, in 2010, is when he found Miguel McKelvey. Between them they conceived the idea of ​​renting office spaces focused on sustainability and the environment (Green Desk). Until they decided to give the model a spin and launched We Work. They obtained initial financing of 15 million. “A space where you can fall in love, have free coffee, a beer dispenser and ping-pong tables.” Apparently, the concept of We Work was based on Adam Neumann's childhood experience, when he lived on a kibbutz, a communal agricultural colony in Israel. His intuition was rewarded with the coworking boom. We Work once had 425 offices in 100 different cities and was even the largest private occupier of office space in Manhattan. Its market value skyrocketed to 45 billion euros.

Adam Neumann's personal fortune also skyrocketed to over 2 billion euros. He spent tens of millions on luxury homes and filled them with eccentricities such as infrared saunas and plunge pools. However, the Israeli businessman sinned in greatness. He wanted to extend the “We” business model to community housing, to an international network of schools, to a chain of gyms...

The cold shower came when he wanted to look into the stock market and had to make We Work's figures public. His business model was based on expensive rentals, but he did not own any real estate assets and therefore lacked sufficient assets. In the year before going public, in 2018, losses were 1.6 billion, compared to income of 1.8 billion. The debt was unsustainable. He had to turn back.

Adam negotiated his departure from the company very well in 2019 thanks to good personal relationships with Masayoshi Son, the top executive of the Japanese bank SoftBank –first shareholder–, whom he used to call “Master Yoda.” The pandemic ended the dream of We Work. The company suspended payments, although several offices continue to operate.

Now Neumann has returned to the ring with a new startup called Flow (with the support of 350 million from the firm Andreessen Horowitz), to apply the sense of community in multifamily residences and which has stakes in 4,000 homes in the United States. His idea is to buy back We Work (currently barely a residual stock market value of 17 million), for about 500 million. Adam is married to Rebeka, the cousin of actress Gwyneth Paltrow. They have six children in common. The sense of community, once again.