On-demand workspace startup WeWork has secured significant funding from investors and has aggressive plans for global expansion, but the company's losses are ballooning, according to reports in The New York Times this week.
According to the company's latest financial disclosure, the firm's losses have hit $1.9 billion as of last year. Total revenue has doubled to about $1.8 million, however, and reports said WeWork remains confident and bullish on its growth.
"We can very much, if we choose to, moderate our growth and become profitable," the company's President Artie Minson told the publication. "But it's a time for us to continue to accelerate."
"We're looking at building this business out," added WeWork Vice Chairman Michael Gross,
“not just maximizing profitability over the next one to two years."
Its confidence can be traced, in part, back to its $42 billion valuation, which reports said makes it one of today’s most valuable private firms. SoftBank is among its investors, having boosted its investment in the company by $2 billion earlier this year. So far, SoftBank has provided $10.5 billion for WeWork.
"They're our closest partner, and they've been extremely supportive," said Minson earlier this year when SoftBank made its latest injection of cash into the firm.
Reports noted that many technology giants, including Uber, validate significant losses as the cost of expansion. Yet The Times noted that other technology heavyweights that went public with heavy losses, including Snap, Inc. and Groupon, have seen their share prices decline since their initial public offerings.
WeWork said it holds $6.6 billion in cash and committed capital, reports said, and secured $702 million from a bond sale last year. Earlier this month, the company announced the launch of an incubator program, WeWork Food Labs, dedicated to food industry startups.
"We have no need to tap the equity capital markets, but there's a lot of interest and demand in our story," Gross noted.