WeWork is facing intense scrutiny for its losses and lofty promises — and it hasn’t even gone public yet. In addition to skeptical investors, the co-working company has to worry about competitors stealing customers. And while the concept of shared, flexible workspaces seems to be sticking, there doesn’t seem to be a moat surrounding the business model.
Regus (IWG.L), Knotel (which just became a unicorn), and Industrious are existing juggernauts. The Wing, which was seen as a WeWork for women, now allows male members.
Other players like Liquidspace want to run the platform instead of doing the cost and time-intensive work of building and designing. Akin to Airbnb, it’s merely serving as the platform for freelancers, contractors, and business owners to find a place to work.
While most are operating under the notion that people want to sign up for a yearlong membership, players like Spacious give restaurants and bars a chance to make use of its space during off hours by renting it out to those looking for a workspace. Splacer is a platform that connects users to art galleries and penthouse suites to throw a party or host a popup for a few hours.
The non-committal nature of work has also boosted business for LiquidSpace, according to new analysis from Thinknum Alternative Data. The San Francisco-based startup has been around since November 2010, just a few months after WeWork. And it’s profitable. There are 24,000 spaces available on the database, compared to 18,000 earlier this year.
“What’s striking about the locations is that they’re not just in city centers as you would find with, say WeWork or Knotel. Instead, you could find a desk or an office in your neighborhood or in ‘cool’ spots like Williamsburg or Red Hook where young entrepreneurs want to be,” Thinknum publisher Joshua Fruhlinger told Yahoo Finance.
“Like Airbnb - say you’re a tourist in NYC and you don’t want to stay in midtown with all the other tourists. No, you want to live like a local, so you rent a cool brownstone in Fort Greene. People want local, convenient, and cool places to work in. That writer doesn’t want to go work in midtown, but she may grab a desk at a space in her neighborhood instead of the local cafe with bad wifi,” he added.
Softbank, WeWork’s biggest investor, has been urging the company to postpone its public offering. But according to new reporting from CNBC, the IPO roadshow could start as early as next week. The “We Company,” once valued at $47 billion, is now looking at a $25 billion valuation with very little demand, much due to its money-losing plight. In the first six months of 2019, WeWork lost $690 million. In 2018, reported a loss of $1.7 billion.