Source: Recode – All
A lot is riding on a new London-based COO to help justify the company’s $45 billion valuation.
WeWork is shuffling around some of its most senior executives as it tries to build out its international presence, which is a big test for the office-rental company in justifying its recent $45 billion valuation.
Eugen Miropolski, who previously oversaw WeWork operations in all of Europe and Asia excluding Japan, has been named the company’s chief operating officer, the company told Recode, and will remain based in London — a move the company says is out of a desire to charge forward in new overseas markets.
Its current COO, Jen Berrent, is moving to a co-president role and will remain WeWork’s chief legal officer and a direct report to Adam Neumann, the company’s CEO. The COO position in particular has seen a good amount of turnover at WeWork as the company scales: Berrent had been in the position for a little under two years, succeeding Artie Minson, who was the COO for also about two years before becoming the company’s chief financial officer and sole president. Both Berrent and Minson were based in the US.
So, yes, the people advising Neumann are remaining the same. But the move to promote Miropolski, who at one point oversaw Airbnb’s growth in Europe, reflects how WeWork very much needs to prioritize its international footprint — especially since becoming so closely aligned with SoftBank, the Japanese-based conglomerate which has funneled billions of dollars into the company at a much-questioned valuation to try and help it become a global juggernaut.
“There is no one more equipped to operationalize our vision for our next phase of growth,” Berrent said of her successor.
Miropolski, who is only 31, said that his “primary focus” as COO would be to expand WeWork’s offerings “whether they’re in Jakarta or Johannesburg.”
Johannesburg, for instance, is expected to be WeWork’s first office in all of Africa. The New York-based company over the last few years has been trying to drastically scale up its international presence, entering nine new countries in 2018, in addition to the 18 it was already in. WeWork says at the end of the last fiscal year that 58 percent of its total workspace desks were based outside of the United States, while only 41 percent of them were a year before that.
WeWork has had overseas offices since 2014 — company executives admit it could arguably have been overextending itself given that the company was hardly dominant in the United States — but international expansion is the WeWork’s best opportunity to keep up the rapid growth rate that investors like SoftBank expect to see. It has become, for instance, the largest private tenant in London.
Other markets are more undeveloped: China, which Miropolski oversaw, is in particular a huge test for WeWork as one of its fastest-growing regions. The company now has 74 locations in China in eight cities, and SoftBank has invested hundreds of millions of dollars in WeWork China, a China-specific venture. But the company has hit some snags recently in markets like Hong Kong.
All this global expansion ended up costing the company $2.5 billion last year. The grow-now approach means that WeWork sustains massive overall losses — $2 billion last year, or twice what it lost the year before. But company leadership has said that it is emphasizing expanding to new markets over laying out any path to profitability that it might seek to prepare for an IPO.