WeWork, Uber & the moment of reckoning in venture capital


Manage episode 244326754 series 2474030
By Equity Mates Media. Discovered by Player FM and our community — copyright is owned by the publisher, not Player FM, and audio is streamed directly from their servers. Hit the Subscribe button to track updates in Player FM, or paste the feed URL into other podcast apps.
WeWork has been front of mind over the past few weeks. The office space leasing company funded by Softbank's Vision Fund had expected a $47 billion value at IPO. Instead, the company had to pull its IPO as its expected value dropped to below $20 billion. Days later, the company dismissed the co-founder and CEO Adam Neumann. After pulling the IPO, questions have now arisen about WeWork's ability to stay solvent. Some estimates suggest WeWork may run out of cash within the year (for context: in 2018, WeWork lost $1.8 billion or $200k every hour).

In this episode of Equity Mates, we make the case that WeWork is just the tip of a VC-fuelled, over-inflated iceberg. In fact, over the last few years a number of unprofitable unicorns (a unicorn is a private tech company valued at $1 billion or more) have gone public. It seems that public market investors are not as tolerant of companies that lose money, and this has been reflected in their share price.

To give you an sense of what we're discussing, below is a list of a few companies mentioned in this episode and their share price movement since IPO (price as of recording date):
  • WeWork pulled IPO
  • Uber down 29%
  • Lyft down 50%
  • Slack down 33%
  • Spotify down 21%
  • Snapchat down 46%
  • Dropbox down 31%
  • Peloton down 19%

In this episode you will learn:
  • How WeWork is just the tip of the iceberg of tech unicorns now struggling in public markets
  • What led to these inflated valuations in the first place
  • How the iPhone's release in 2007 sparked a decade-long, venture capital boom
  • What recent VC megadeals, including deals by Softbank, have meant for these companies
  • Why now is the time that this VC bubble is ending
  • How public market investors should think about these events

Remember, our live show are coming up fast. Register for free today so you don't miss out.
  • Melbourne - Wednesday 23 October - 6pm
  • Sydney - Tuesday 29 October - 6pm
For all the details and to register: https://equitymates.com/finimize/

193 episodes