WeWork documents reveal it owes $18 billion in rent and is burning through cash as it seeks more funding

Adam Neumann

WeWork CEO Adam Neumann.

• Office leasing startup WeWork plans to raise more funding through a $500 million bond sale, according to The Financial Times.
• It's the first time the company is raising money from debt investors after it raised billions in venture capital from backers such as SoftBank.
• WeWork revealed startling underlying numbers for its business in its bond sale documents, such as the fact it owes $18 billion in rent.
• The company's revenue rose dramatically last year, but its costs rose faster.

WeWork, the office leasing startup, is looking to raise more cash through its first ever bond sale, despite having raised billions in venture funding already.

WeWork is planning to sell $500 million (£358 million) in high-yield notes, per reports from the Financial Times and Bloomberg this week.

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And bond documents reviewed by the two publications reveal some startling numbers. Here's a summary:

• WeWork owes $18 billion (£12.8 billion) in rent. The company has more than 14 million square feet in office space, with suitably massive lease obligations - though WeWork does have the option of closing locations if it can't pay those bills.
• WeWork is burning cash. Revenue from memberships more than doubled in 2017 to $822 million (£589 million), but expenses more than doubled to $1.81 billion (£1.3 billion) the same year. Net losses in 2017 came to $934 million (£669 million), according to Bloomberg.
• It isn't really about tech startups. A fifth of WeWork's occupants are in financial, legal, and business services. Just 15% work in software.
• Focus on bigger companies means higher occupancy rates. Filling desks, and keeping them filled is an important metric for WeWork, which says it has filled 81% of its desks - higher than its minimum requirement of 60% occupancy to cover costs.
• Like other tech CEOs, boss Adam Neumann controls the company. He has more than 65% of the voting power.

You can read Bloomberg's full analysis here, and the Financial Times' here.

WeWork has expanded rapidly, helped by the $4.4 billion it raised last year from its main backer SoftBank. According to its bond documents, the company had 220,000 members as of March, and 251,000 desks across 234 locations.

Sceptics worry that WeWork is overly exposed to market shifts that could impact its occupants, and their willingness to pay the company's membership fees. The optimistic view, however, is that WeWork's leases eventually generate more cash than its costs as occupancy rates rise and the company gets its upfront spend on the "fit-out" for new properties out of the way.