NEW YORK (Reuters) – Two of the top technology investors are cautioned against drawing broadconclusions on the valuation of private companies from asking that of the AMERICAN office-sharing startup WeWork.
FILE PHOTO: WeWork’s logo will be displayed at the entrance of a new co-working space in New York City, New York, New York, USA on January 8, 2019. REUTERS/Brendan McDermid/File Photo
Scott Kupor, a managing partner of a 10-billion-dollar venture-capital firm Andreessen Horowitz, said at the CNBC Institutional Investor Delivering Alpha conference, and that it would be dangerous to generalize from the WeWork situation results from the convergence of several factors.
These include governance issues, it will be a “late-cycle, and the cash-consuming company, and of the tensions between the traditional real estate valuation techniques and more future-oriented as those favored by some of us in Silicon Valley,” he said.
“Well, that is what public market investors are struggling with these hybrid companies,” Kupor said. “How many of your business look like you have a hardware or other business and how much it will cost to really have a margin, and the city will look like in a technology company.”
Andreessen Horowitz is not a WeWork investors.
WeWork, the owner of The Company, postponed its initial public offering this month, after a barrage of questions related to the evaluation. Reuters reported last week that We are in the Business, it was considering seeking a rating, at the time of the IPO at between $10 billion and $12 billion, a significant reduction from the $47 billion, the valuation of the level in January.
Glen Kacher, chief investment officer of the $2-billion of Light Street Capital Management, LLC, said that no one should be surprised by a fast-changing valuations of private companies such as WeWork, given how often major fluctuations in the public markets.
“That’s the market,” Kacher said, ” speak Kupor, at the annual New York City event. “I don’t think it’s a big deal to me.”
Kacher contrast, WeWork with Uber Technologies Inc. UBER.(N), of Light Street, and the investment is.
He said Uber’s “SaaS,” or software-as-a-service, and the cars and the drivers that can be used by multiple customers, each and every day, as a set of WeWork’s lease, an agency may only be used by one client at a time.
“That’s where the technology is to be married, with these assets and to create the services and … this is a very unique and cost effective solution (for Uber),” he said. “In contrast to WeWork, which is like the cutting of a floor, in a very small space. That is, it is in their technology.”
Kacher said that he continues to search for SoftBank Group (9984.(T) is an “interesting investment opportunity, in part because Uber represents a larger portion of the portfolio over WeWork.
Previously, the U. s. Securities and Exchange Commission (the head of Jay Clayton in an on-stage interview at the conference, it would not respond to WeWork’s initial public OFFERING in a direct way.
He said, however, that it was “no surprise” to him, and that there would be a variety of ratings, from both the public and private markets for the same type of business.
“The price discovery mechanism is completely different,” said Clayton.
Reporting by Lawrence Delevingne; Editing by Jennifer Ablan and Tom Brown