WeWork hires real estate pro as CEO in an attempt to turn around the company
Posted February 2, 2020 12:00 p.m. EST
CNN — WeWork has appointed Sandeep Mathrani as its new chief executive, the company announced Sunday.
Mathrani is a seasoned real estate executive who will be tasked with turning around the fortunes of the troubled start-up, following its failed IPO last year.
Mathrani will officially assume the top job on February 18. He will take over from WeWork execs Artie Minson and Sebastian Gunningham, who had been working as co-CEOs since the September departure of disgraced former CEO and co-founder Adam Neumann.
"I am honored to be joining WeWork at this pivotal time in its history," Mathrani said in a statement Sunday. "The Company has redefined how people and companies approach work with an innovative platform, exceptionally talented team and significant potential if we stick to our shared values and maintain our members-first focus."
Under Neumann's leadership, WeWork raised billions of dollars and scaled its co-working operations to hundreds of cities around the world. The company was valued at an eye-popping $47 billion during one investment round. But also under Neumann, the company failed in its attempt to go public in large part because IPO paperwork revealed his unchecked power and numerous potential conflicts of interest, as well as WeWork's staggering losses.
In October, SoftBank took 80% ownership of the company as part of a deal to pump in $5 billion and accelerated a $1.5 billion equity investment, which was originally due in 2020. The package valued WeWork at $8 billion, just a fraction of its peak valuation.
Mathrani will report to WeWork's executive chairman, Marcelo Claure, who recruited him to join the company. Claure is also board director and COO of SoftBank Group Corp. He was put in place as WeWork's executive chairman just over three months ago as part of the SoftBank bail out.
Since Claure joined the company, WeWork has developed a five-year strategic plan that Mathrani will be tasked with executing. The plan includes achieving profitability on an adjusted EBITDA basis by 2021 and reaching positive free cash flow by 2022, according to the company's statement.
That would be a significant turnaround from 2018, when it lost a staggering $1.9 billion, according to its IPO prospectus last year.
"Over the past 100 days since I joined WeWork, we have made tremendous progress strengthening the business," Claure said. "We continue to make important changes to implement a strong management team that better enables the Company to execute."
Mathrani will bring his real estate chops to that management team.
He most recently served as CEO of Brookfield Properties' retail group. Before that, he served as CEO of GGP Inc. prior to its sale to Brookfield in 2018, as well as president of retail for Vornado Realty Trust and executive vice president at Forest City Ratner.