IDR 733 Trillion Startup Bankrupt, Founder Actually Rich Tech – 3 hours ago

Jakarta, CNBC Indonesia – WeWork officially files for bankruptcy. The coworking space company founded in 2010 went bankrupt after becoming a startup favored by investors and reaching a valuation of US$ 47 billion (Rp. 733 trillion) in 2019.

However, WeWork’s bankruptcy is inversely proportional to the fate of its founder, Adam Neumann. The wealth of the central figure behind the rapid growth and collapse of WeWork is reportedly increasing rapidly.

Neumann is not like other startup founders whose wealth evaporates along with the valuation of the company they founded. This 44 year old man is actually accumulating wealth ahead of WeWork’s transformation into a public company.

Nemumann resigned in September 2019 after governance problems at WeWorks were exposed during its IPO process. It turns out that the CEO often enriches himself in strange ways, such as giving himself company shares worth US$ 6 million to pay for the copyright for the word ‘We’.

Various reports also described Neumann’s unusual management style, including a culture of debauchery. Ultimately, WeWork’s IPO failed.

After failing at its IPO, WeWork underwent a merger process with a SPAC, which is a shell company established as an entry point for companies that want to go public.

As part of the merger, SoftBank reportedly gave Neumann US$ 480 million (around Rp. 7.5 trillion) to buy half of all his shares. Neumann received this payment after he took SoftBank to court because the startup investor canceled plans to buy all of Neumann’s WeWork shares at a price of US$ 1 billion (Rp. 15.62 trillion).

Neumann also received US$ 185 million (Rp. 2.9 trillion) as part of a non-competition clause (which prohibits Neumann from negotiating with other potential buyers) and US$ 106 million (Rp. 1.6 trillion) as part of an outside lawsuit settlement. court.

In total, despite being kicked out of WeWork years earlier, Nuemann earned US$ 770 million (Rp. 12 trillion) during the merger process. Apart from that, Neumann still has shares in WeWork whose value is estimated to reach US$ 722 (Rp. 11.29 trillion) when WeWork goes public.

After WeWork went bankrupt, the remaining shares were worth zero. However, it is possible that Neumann has already sold his remaining WeWork shares.

Now, Neumann is busy with his new startup which is also active in the real estate sector, called Flow, which has reached a valuation of US$ 1 billion.

Flow reportedly now has 3,000 residential units in various cities in the United States (US). According to CNBC International, Flow’s business model remains unclear but appears to be a replica of the co-working business model that WeWork pioneered in the residential market.

[Gambas:Video CNBC]

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