The decline of WeWork over the last year has had ripple effects, depressing investor confidence in the entire brand of property technology (PropTech), to which WeWork belongs. PropTech encompasses everything from building management technology — like sensors that capture real-time temperature-change data — to things like Opendoor, which allows users to buy and sell homes via a computer algorithm.
According to a survey, 45 percent of property technology investors said they would make new investments in the field this year, which was down from 64 percent last year.
WeWork intended to launch an initial public offering (IPO) last year, but that ended up failing, and the company was bailed out by SoftBank. The incident helped the industry to see the realities of the market as a business model. According to Aaron Block, co-founder of New York venture capital firm MetaProp, the huge losses and lack of a clear plan to profit hampered WeWork’s initial promise as a company.
The focus for investors could shift away from PropTech, and more onto technological innovations that could shake up the real estate industry, according to Block. Startups in the field haven’t lost their confidence in raising funds, though, with 81 percent expecting it to be easier to do so this year — or, at least, about the same as last year.
As for WeWork, parent company We Company is remaking its management team, and wants to salvage itself the best it can. Last week, it added SoftBank’s Kirthiga Reddy as a new board member — the first woman on We Company’s board.
WeWork also got a new CEO recently, industry veteran Sandeep Manthrani, who will take his position on Feb. 18. Current CEOs Sebastian Gunningham and Artie Minson will stay on in advisory roles to help Manthrani transition into the job. Manthrani’s experience in the real estate field was attractive to the company as it navigated out of its troubles from 2019.