WeWork appointed Indian-American executive, Sandeep Mathrani, as the company’s new chairman on Sunday.
“WeWork (or “the Company”) today announced that Sandeep Mathrani will join the Company as Chief Executive Officer and a member of the Board of Directors, effective February 18, 2020,” WeWork said in the official release.
Mathrani will be replacing co-CEOs Artie Minson and Sebastian Gunningham and will report to Marcelo Claure, a SoftBank operating chief who was appointed as the executive chairman of WeWork back in October 2019.
Focus on real estate
Mathrani, who was previously the CEO of real estate company Brookfield Properties’ retail division, holds a strong portfolio in real estate. He also serves on the executive board and the board of trustees for the International Council of Shopping Centers, the executive board and 2019 chair of the National Association of Real Estate Investment Trusts, apart from being on the board of directors for Host Hotels & Resorts, Inc.
The new shift in leadership is testament to WeWork’s strategy of moving away from co-founder and prior CEO, Adam Neumann’s vision of being bullish on technology for the company’s growth, rather than focusing on its real estate aspect.
“Mathrani brings to WeWork extensive leadership experience in real estate, with a proven track record of transforming companies and driving meaningful growth to create value for stakeholders. Mathrani’s deep real estate experience and skills are highly complementary with those of Claure,” the company’s official press statement read.
Botched IPO attempt
This shift is in light of WeWork’s botched IPO attempt back in September, which led to a major dip in its valuation and the removal of its then CEO, Neumann.
WeWork had filed for IPO back in August 2019. The offer was botched due to the scepticism of public investors in light of the company’s spiralling losses and media reports of Neumann’s unflattering leadership and policies for the company.
According to a Business Insider report, the company had incurred a loss of $690 million on $1.5 billion in revenue within the first six months of 2019.
Private valuation of the company stood at $47 billion before the IPO. The company’s valuation had dropped to less than $10 billion post IPO, according to media reports.
According to a TechCrunch report, SoftBank has made a commitment of $18.5 billion till date to rescue WeWork, gaining more control in the company’s overall operations.
WeWork has planned to recapitalise the business and access over $2.5 billion in liquidity to execute its five-year growth plans. Furthermore, the company also aims to become profitable on an adjusted EBITDA basis by 2021 and achieve positive free cash flow in 2022.
Despite WeWork’s losses in America, WeWork India, a JV between the WeWork brand and Embassy Group, owned by Indian real-estate billionaire Jitendra Virwani, has been faring well, according to previous reports. The Embassy group holds about 90 per cent of the share in the JV.
Source: The Hindu