No, WeWork Isn’t a Tech Company. Here’s Why That Matters

This article ran in HBR China's print edition, June 2020.

Last week, WeWork, the coworking space now known as The We Company, released its S-1 filing to go public. That spurred numerous concerns about the company’s large valuation ($47 billion at last count), given its hefty losses ($1.6 billion on revenues of $1.8 billion) and despite its rapid growth (86% year-over-year revenue growth). It also renewed questions about WeWork’s claims of being a tech company (the word “technology” appears 110 times in its prospectus) and about whether it’s worth a tech-type high valuation. Pundits have long argued that it is not a tech company, but a modern-day real estate company — purchasing long-term leases from landlords and renting them out as short-term leases to tenants. Many have also argued that WeWork does not deserve the large EBITDA-based (earnings before interest, depreciation, and taxes) valuation multiple that is often ascribed to tech companies.

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