Co-working space company WeWork dealt with a number of setbacks last year, including a failed initial public offering (IPO) and the resignation of its co-founder and Chief Executive Adam Neumann. The company was not the only entity that these setbacks hurt however. For example, The Wing is a co-working startup company founded in 2016 that delivers offerings that focus on women to set it apart from competitors. It was valued at $365 million in 2018. When WeWork’s IPO failed, it put a lot of the co-working industry in a negative light and The Wing’s valuation dropped to about $200 million, Bloomberg reports.
WeWork initially invested in The Wing in 2017, but sold its stake in January to a group of investors, including the Creative Artists Agency (CAA). WeWork became cash strapped after its failed IPO and began to sell any assets that were not related it its core business. The company started to look for buyers in the fall, according to Bloomberg. WeWork lost approximately $17 million from its investment in The Wing. It also lost money when it sold other businesses, including Managed by Q. Meanwhile, the sale brought the Wing’s valuation down to $165 million at the time.
The Wing looks to bounce back
Despite its troubles regarding WeWork, not all is lost for The Wing. Investors put in an additional $15 million in funding through a convertible note that’s expected to convert at an approximately $365 million valuation when The Wing raises more capital.
“Our investors were able to take advantage of a unique and unexpected opportunity with WeWork,” The Wing spokeswoman Zara Rahim told Bloomberg. “They doubled down on their commitment to the company by increasing their ownership and putting an additional $15 million in new capital that will help us grow and scale.”
The Wing currently has 12,000 active members and has had triple-digit revenue growth in each of the last three years, according to Rahim. It currently operates 12 locations across the United States and in London, and is set to open additional workspaces in Toronto, Seattle and Los Angeles.
The company, like WeWork and other co-working companies, is not profitable yet, according to someone familiar with company. However The Wing has garnered a lot of interest in terms of star power. Tennis star Serena Williams’ company and SoulCycle co-founders Julie Rice and Elizabeth Cutler were some of the company’s earliest investors. Avid Ventures, DAG Ventures and real estate investment firm DivcoWest were among the investors to buy WeWork’s stake in The Wing along with CAA.
“We are proud to be investors of The Wing,” CAA’s Michael Blank said. “So many of our clients have shared their projects and causes at their spaces and with their members, and we are thrilled to partner with them to help further their important mission of advancing women.”