WeWork CEO says company hit $2.5 billion in annualized revenue

WeWork CEO Adam Neumann said his company reached annualized revenue of $2.5 billion in the fourth quarter and has plenty of cash on its books, even with SoftBank’s scaled-back investment.

Neumann told CNBC that he’s not concerned that SoftBank pulled way back after initially agreeing to invest $16 billion in the company, which provides coworking office space and is busy expanding into other areas. And he still has plenty of praise for SoftBank CEO Masayoshi Son, whose presence in the venture capital landscape has ballooned over the last few years with the $100 billion Vision Fund.

“There’s something beautiful about Masa and my relationship,” said Neumann. WeWork has now raised a total of $10 billion from SoftBank, including the first $3 billion after a short meeting between Neumann and Masa. Neumann said that when negotiations get tough, they approach each other as partners, explain each other’s limitations and, “thread the needle in between.”

Most of SoftBank’s recent investment is at a post-money valuation of $47 billion, but $1 billion of the investment was at a lower, pre-money valuation of $20 billion.

The amount WeWork — now rebranded as the We Company — received is “above and beyond what we need to fund the company for the next four to five years,” Neumann said.

The company burns a lot of cash, but it’s also growing rapidly, more than doubling memberships in 2018 to 372,000, according to preliminary year-end numbers shown to CNBC. The run rate of $2.5 billion is up from $2 billion the prior quarter.

Actor Ashton Kutcher, who’s a start-up investor and a strategic partner at WeWork, joined Neumann for the interview. Kutcher defended the final deal and talked about what it was like to work with and against Son. They’re both investors in Uber, but Kutcher said that he and other VCs are increasingly competing with SoftBank on deals.

“Now, I’m also on the other side of the table with Masa on a couple deals,” Kutcher said. “And that’s frustrating as hell.”

Kutcher said the Vision Fund has changed the game for venture capital investing.

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