A shared user account used by WeWork employees to access printer settings and print jobs had an incredibly simple password — so simple that a customer guessed it.
Jake Elsley, who works at a WeWork in London, said he found the user account after a WeWork employee at his location mistakenly left the account logged in.
WeWork customers like Elsley normally have an assigned seven-digit username and a four-digit passcode used for printing documents at WeWork locations. But the username for the account used by WeWork employees was just four-digits: “9999”. Elsley told TechCrunch that he guessed the password because it was the same as the username. (“9999” is ranked as one of the most common passwords in use today, making it highly insecure.)
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The “9999” account is used by and shared among WeWork community managers, who oversee day-to-day operations at each location, to print documents for visitors who don’t have accounts to print on their own. The account cannot be used to access print jobs sent to other customer accounts.
Elsley said that the “9999” account could not see the contents of documents beyond file names, but that logging in to the WeWork printing web portal could allow him to release other people’s pending print jobs sent to the “9999” account to any other WeWork printer on the network.
The printing web portal can only be accessed on WeWork’s Wi-Fi networks, said Elsley, but that includes the free guest Wi-Fi network which doesn’t have a password, and WeWork’s main Wi-Fi network, which still uses a password that has been widely circulated on the internet.
Elsley reached out to TechCrunch to ask us to alert the company to the insecure password.
“WeWork is committed to protecting the privacy and security of our members and employees,” said WeWork spokesperson Colin Hart. “We immediately initiated an investigation into this potential issue and took steps to address any concerns. We are also nearing the end of a multi-month process of upgrading all of our printing capabilities to a best in class security and experience solution. We expect this process to be completed in the coming weeks.”
WeWork confirmed that it had since changed the password on the “9999” user account.
Four years after its foray into the Chinese market followed by rapid and cash-hemorrhaging expansion, WeWork decided to wind down its involvement in the country.
WeWork’s Chinese unit has secured a $200 million investment led by Shanghai-based equity firm Trustbridge Partners, which first backed WeWork China in its Series B round in 2018, the American co-working giant announced. What the release didn’t emphasize is that the latest financing effectively makes Trustbridge Partners the controlling shareholder, leaving WeWork with a minority stake in its Chinese entity.
The investment marks WeWork China’s transition from a subsidiary of a multinational into a Chinese-owned company — with a globally recognized brand, sort of like franchising.
WeWork China will continue its close cooperation with WeWork’s global headquarters to “ensure the consistency of the WeWork brand and satisfication of global members and employees,” a spokesperson said in a statement to TechCrunch.
Other changes are already underway, though. There have been layoffs as part of the sale and “many things remain uncertain,” said the person with knowledge of the matter. WeWork China declined to comment on the matter.
WeWork arrived in China at the height of the country’s co-working boom. Its brand, service and chic design have long attracted well-financed startups and open-minded big corps. Since 2016, more than 100 WeWork spaces have sprung up across 12 cities in China, including dozens it acquired from local rival Naked Hub. It now claims 65,000 members in the country.
It’s also launched a range of initiatives in China, including an on-demand service for customers who don’t want to commit to long-term leases, which could help drive in more revenue.
Globally, WeWork serves 612,000 members in 843 offices across 38 countries. China accounts for roughly one-eight of its locations, down from a share of one-sixth in 2018.
WeWork China is not only competing with cheaper, home-grown alternatives — both private and government-subsidized — but also dealing with a weakening economy in COVID-19 times and uncertain U.S.-China relations. Relinquishing operational control in a cash-burning market seems logical, given all the troubles it already faces back home.
Ahead of its planned initial public offering, which was later postponed, WeWork said trade policy uncertainty could have an adverse impact on its business. It also highlighted China, a lower-priced market, as a drag on its profit margin.
Following the investment, Trustbridge Partners will launch an extensive localization makeover for WeWork China, from “decision-making and management, product and business, through to operations and productivity,” said the WeWork China representative. The new owner will also seek partnerships with local communities, real estate firms and Chinese enterprises during the process.
WeWork China gets a new boss as a result of the sale. Michael Jiang, ann operating partner at Trustbridge Partners, will serve as the acting chief executive. Jiang was previously a senior vice presidnet at Meituan, China’s food delivery and on-demand services giant.
Earlier today at TechCrunch Disrupt, venture capitalist Peter Fenton joined us to talk about a variety of issues. Among them, we discussed how he’s putting his stamp on Benchmark now that, 15 years after joining the storied firm, he’s its most senior member.
Fenton said that he’s mostly focused on ensuring that the firm doesn’t change. It wants to remain small, with no more than six general partners at a time. It wants to keep investing funds that are half a billion dollars or less because its small team can only work closely with so many founders. He also made a point of noting that Benchmark’s partners still divide their investment profits equally, unlike at other, more hierarchical venture firms, where senior investors reap the biggest financial benefits.
We also talked about diversity because Benchmark — which is currently run by Fenton, Sarah Tavel, Eric Vishria and Chetan Puttagunta — is hiring one to two more general partners.
We talked about the opportunities that has Benchmark, and Fenton specifically, most excited right now.
And we talked about why Benchmark, a Series A investor in both Uber and WeWork, seemingly took so long to address cultural issues within both companies. Read on for more, or check out our full conversation below.
On whether Benchmark, which historically had all white male partners and now counts Fenton as its only white male partner, might hire a Black partner on his watch, given the dearth of Black investors in the industry (along with the changing demographics of the U.S.):
“That’s a personal issue for me, which is going to be measured in the outcomes, just like we have companies that take on initiatives that matter and then measure them and hold themselves accountable. I won’t feel good about our failure if we don’t continue to tilt towards diversity. It’s not enough that I’m the only white male partner. The industry is so systematically skewed in the wrong direction, and we’ve gotten so good at rationalizing how it ended up here, that I don’t think we can tolerate it anymore.”
Benchmark is looking to reinvent itself through “three interfaces,” he continued. “It’s who are we talking with and spending time with in terms of [who we might invest in] — that has to change; who are the people making investment decisions, [meaning] the partnership; and then what’s the composition of the companies we’ve invested in, meaning the executives and the boards.
“Before I’m done with the venture business, I want to be able to point to empirical outcomes . . .”
As for why Benchmark waited for the public to rally against its portfolio companies Uber and WeWork before taking action to address cultural issues (in Uber’s case, in reaction to former engineer Susan Fowler’s famous blog post and, in the case if WeWork, in reaction to its S-1 filing):
“I can’t give you a crisp answer because ultimately, what happens in the public eye isn’t the whole story of what was going on between Benchmark and those CEOs.” It’s “far more complicated, far more nuanced, far more engaged.”
Said Fenton: “What you start with in any partnership is this idea that we’re all flawed and providing what feels like unconditional support to a founder to nurture them and help them to understand in ways they might be able to from their direct reports where they are going to get in trouble, where they’re going to fall short, and then buttress them.
“I can say, having watched both [Benchmark investors] Bruce [Dunlevie] and Bill [Gurley] in those roles that they give their heart and soul to enable the full potential of those entrepreneurs, and in each case, it wasn’t enough.
“I don’t know what to say other than, I don’t envision another individual in that [board] role being able to do a better job because what they gave was everything, and those companies built enormous organizations, great success, delight and joy for customers, and they had, in each of their cases, pathologies in their culture. A number of companies that I’m involved with have pathologies in their culture. Every organization can build them. What motivated both Bill and Bruce was the constituencies that go beyond the CEO, the employees, the customers, and in the case of Uber, the drivers . . .
“You could say Susan Fowler was the reason it all happened; I can assure you that the work that was being done far preceded that. Could we have done more, more quickly? You always look back and say, ‘Yeah.’ I think you learn as an organization. We’re not perfect.”
As for the trends that Fenton is watching most closely right now, he suggested a world of opportunities have opened up in the last six months, and he thinks they’ll only gain momentum from here:
“What I’m most excited about is, we’re not going back to normal. What’s so amazing is this shock to the system is really a big opportunity for entrepreneurs to come and say, ‘What do we need to build to recreate and unlock all these things we lost when we stopped going into workplaces?’
“So I think this opportunity to build the tools for a world that’s ‘post place’ has just opened up and is as exciting as anything I’ve seen in my venture career. You walk around right now and you see these ghosts towns, with gyms, classes you might take [and so forth] and now maybe you go online and do Peloton, or that class you maybe do online. So I think a whole field of opportunities will move into this post-place delivery mechanism that are really exciting. [It] could be 10 to 20 years of innovation that just got pulled forward into today.”
This one is unusual: Laird Superfood, a five-year-old, 100-person, Sisters, Ore.-based startup that was cofounded by famed surfer Laird Hamilton and which makes plant-based packaged beverage products, filed today to raise up to $40 million in an IPO.
We’d reported on this company early last year in large part because it had attracted backing from WeWork, the co-working company that famously made a number of bets that were very afield from its business (including a maker of wave pools) before suffering a major meltdown last fall.
In fact, according to Crunchbase, WeWork Labs provided Laird Superfood with a whopping $32 million — the bulk of the $51 million it has raised altogether, per Crunchbase. (WeWork founder Adam Neumann has said that he surfed with Hamilton in Hawaii.)
At that time, WeWork’s investment was the strangest thing about the business, a largely direct-to-consumer business that makes “superfood” coffee creamers, beverage supplements that include “performance mushrooms,” Peruvian coffee beans, and an assortment of other things, like teas and hot chocolate.
This IPO may be even more curious. Founded by Hamilton and another surfer, Paul Hodge, the company is very young to be going public by today’s standards (biotech startups notwithstanding). The company booked $19 million in sales for the 12 months ended June 30, but it lost $9 million over that same period and at the rate it is spending money, including on sales and marketing, it will see a net loss of $10 million this year.
Management says it has $13.1 million in cash on hand and investments. It would have more if it hadn’t spent $7.5 million buying back Series A-1 preferred shares in November 2019 that were purchased for twice that price. (The investor that sold its shares was also relieved of its commitment to fund another $10 million. It’s easy to imagine this was WeWork, but we don’t know this.) Because of that outlay, the company actually probably did pretty well last year; it just can’t state it that way.
Still, we’re a little intrigued by this one. The only outside shareholder that owns more than 5% of Laird Superfood is Danone Manifesto Ventures, the corporate venture arm of the global food and beverage company. It owns 13.4% of the company. Why wouldn’t Danone, which looks to have invested $10 million in the business in April, just buy out Laird Superfood outright?
It could be that there’s much more than meets the eye here (or is reflected in its S-1). We’re certainly not opposed to companies trying to go public much sooner than has been in the case in recent years. We’re just wondering if this food company is completely baked.
Either way, the decision to go public is certainly becoming an increasingly common one, given how hot the market has been despite the pandemic. According to Renaissance Capital, 27 companies joined the IPO pipeline last week alone.
Hamilton owns 13.2% of the startup. Hodge meanwhile owns 6.4%. Canaccord Genuity and Craig-Hallum Capital Group are the joint bookrunners on the deal. No pricing terms were included in the filing.
Adam Neumann, the controversial co-founder and former CEO of WeWork, has taken a 33% equity stake in GoTo Global, a shared mobility company that operates in Israel and Malta and aims to expand into Europe later this year.
Neumann’s family office, 166 2nd Financial Services, invested $10 million into GoTo Global, as part of a $19 million Series B round. As part of his investment, Neumann will be able to appoint one board member on his behalf. Existing shareholder Shagrir Group Vehicle Services, a publicly traded Israeli company, also participated in the round.
GoTo Global (also referred to is GoTo Mobility) is mobility-as-a-service company that is aiming to cover the entire range of shared vehicles from cars and mopeds to bicycles and electric scooters. The company, which started in 2008 with a focus on car-sharing, previously raised $3 million in seed funding. It had also secured a $9 million loan from Shagrir, which has been converted into the equity investment.
This latest funding will be used to expand its shared services into Europe, beginning with Madrid.
Since forming 166 2nd Financial Services, Neumann has made about 15 investments in startups in Canada, Israel, UK and the United States, including EquityBee, Moon Active and Peach Street.
However, this is Neumann’s first investment since he filed a lawsuit against Softbank Group for alleged breach of contract and breach of fiduciary duty for pulling a $3 billion tender offer for WeWork shares. SoftBank Group pulled its $3 billion tender offer for WeWork shares April 1, citing COVID-19’s impact on the business but also closing conditions not being met.
COVID-19, or more specifically changing consumer behaviors due to the pandemic, is largely what has driven Neumann’s investment in GoTo Global, according to a source familiar with the investment. Neumann isn’t speaking publicly due the lawsuit.
Neumann made the investment because he believes flexibility will be a key component in people’s lives post-COVID-19, the source said.
GoTo Global is just as bullish on its post-COVID future.
“Shared mobility, and transportation in general, was one of industries hit hard by the economy lock-downs as people were required to self-isolate,” GoTo Global CEO Gil Laser said in a statement announcing the raise. “But we are the ones who made the come-back fastest, we are +12% back to pre-lockdown baseline. We understand that although on one hand shared transport may not seem to be the safest solution, on the other hand it is perceived as a safer option than a public transport and it is definitely a much cheaper option than an owned car.”
“Helping navigate the elusiveness of product market fit” is how Sanjiv Sanghavi, the co-founder of ClassPass and itinerant startup executive describes his roles at different companies.
From ClassPass through Knotel, Sanghavi has shepherded several businesses to growth and over a billion dollar valuations, now he’s looking to bring that branding and marketing savvy to the world of renewable energy as the new chief product officer at Arcadia.
The company encourages renewable energy development by offsetting its customers’ electricity usage by buying an equivalent amount of renewable power or investing in renewable energy projects that provide renewable credits to offset fossil fuel usage.
Sanjiv Sanghavi, ClassPass co-founder and now chief product officer at Arcadia. Image Credit:Arcadia
“We founded Arcadia to aggregate the power of consumer demand to fight climate change,” said Kiran Bhatraju, the founder and chief executive at Arcadia, in a statement. “Sanjiv’s deep knowledge of creating and building engaging consumer products will be crucial in the coming years to help us continue to build a world-class home energy experience that people love, and the planet needs.”
Sanghavi will be integral to Arcadia’s expansion into the northeast as it looks to grow its footprint across the United States.
Over the past six months Arcadia has steadily built out its presence across the Atlantic seaboard as it staffs its New York office. The company added a senior vice president of design who previously worked at DoorDash, WeWork, and PayPal, Josh Abrams, and is actively hiring.
“I was drawn to Arcadia because of its lasting power; I wanted to build something that would make an impact for generations,” said Sanghavi. “I believe that what Arcadia is doing is astounding — we’re building a bridge from the people who are generating renewable energy to those who want to do something good.”
The company has raised $70 million to date, according to Crunchbase, from investors including G2VP, BoxGroup, Wonder Ventures and Energy Impact Partners.
After aggressive cost-cutting measures, including mass layoffs and selling several of its businesses, WeWork’s chairman expects the company to have positive cash flow in 2021. Marcelo Claure, who became WeWork’s chairman after co-founder Adam Neumann resigned as chief executive officer last fall, told the Financial Times that the co-working space startup is on target to meet its goal, set in February, of reaching operating profitability by the end of next year.
Claure is also chief operating officer of SoftBank Group, which invested $18.5 billion in the co-working space, according to leaked comments made by Claure during an October all-hands meeting.
In addition to the layoffs, WeWork sold off businesses including Flatiron School, Teem and its share of The Wing. Claure told the Financial times that WeWork also cut its workforce from a high of 14,000 last year to 5,600.
Despite the impact of the COVID-19 pandemic, which forced many people to work from home, Claure said that companies have been leasing spaces from WeWork to serve as satellite offices close to where employees live. But he also said that revenues were flat during the second-quarter because many tenants terminated their leases or stopped paying rent.
WeWork co-founder Adam Neumann accused SoftBank Group of abusing its power in a new lawsuit filed Monday that alleges breach of contract and breach of fiduciary duty for pulling a $3 billion tender offer for WeWork shares.
The lawsuit, filed in Delaware Court of Chancery, included a motion to consolidate his case with a lawsuit filed last month by a Special Committee of WeWork’s board. Both lawsuits focus on SoftBank Group and its Vision Fund’s decision to back out of a deal to buy shares of the co-working company.
SoftBank Group pulled its $3 billion tender offer for WeWork shares April 1, citing COVID-19’s impact on the business but also closing conditions not being met. Specifically, it pointed to outstanding regulatory investigations, a growing body of litigation against the company and the failure to restructure a joint venture in China as reasons to torpedo the agreement.
“SoftBank will vigorously defend itself against these meritless claims,” Rob Townsend, senior vice president and chief officer at SoftBank, said in a statement. “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr. Neumann – the biggest beneficiary – sought to sell nearly $1 billion in stock.”
A deal was struck in October 2019 to buy out some of the equity held by Neumann, as well as the venture capital Benchmark Capital and many individual company employees. Neumann was set to receive almost $1 billion for his shares.
WeWork and Neumann gave control of the company to SoftBank, which increased its ownership at a significantly reduced price, according to the complaint.
“SoftBank has abused its position of power to “renege on its promise to pay [Neumann, shareholders, and hundreds of employees] for the benefits it already received,” the complaint said. The lawsuit claims that SoftBank was “secretly taking actions to undermine it” by pressuring investors not to waive certain rights and preventing the China roll-up transaction from closing.
The lawsuit further alleges that SoftBank’s financial condition influenced the company’s decision to terminate the tender offer.
The lawsuit alleges that SoftBank “abused its power” after WeWork’s special committee filed a lawsuit by insisting that only the board, which is controlled by SoftBank, could take legal action.
“In real time, SoftBank Group and SoftBank Vision Fund are abusing their control of WeWork in an effort to stop the Special Committee’s meritorious lawsuit from being heard,” the complaint reads.
To answer that question, Crunchbase took a look at founders and CEOs across several groupings of startup unicorns. The research included the most heavily funded private companies, newly minted unicorns and companies that recently crossed the $5 billion valuation mark.
The short answer? Yes, immigrants are still heavily represented in the ranks of U.S. unicorn founders and CEOs. They hail from multiple continents, and are leading companies in sectors from e-commerce to crypto to pharmaceuticals.
The long answer? Yes, but maybe less so. Early data indicates the proportion of high-valuation U.S. startups founded or led by immigrants may be trending down some. One factor is the growth of startup hubs outside the U.S., making it easier for founders to launch companies in their home country. The other, most notorious factor: the hurdles of securing a visa as a would-be startup founder.
“There is no visa specifically for someone who wants to start a company,” according to Manan Mehta, founding partner at Unshackled Ventures, a Silicon Valley-based firm that invests in U.S. startups with immigrant founders.
While U.S. student enrollment of foreign nationals roughly doubled from 2007 to 2018, there hasn’t been a corresponding strategy to speed or simplify graduates’ pursuit of a green card, Mehta said. And although that issue predates Trump’s election, the current administration hasn’t helped, deciding not to implement an Obama-era visa program for startup founders.
Still, a striking percentage of funded private companies that crossed the $1 billion valuation threshold this past year are immigrant founded. Below, we take a look at 19 such companies, along with a look founders’ countries of origin.
We also look at the most heavily funded, highest-valuation private companies overall with immigrant founders and CEOs.
The big picture
If investors are backing fewer immigrant-led U.S. startups, it may be because there are fewer available to back. For the 2018-19 period, U.S. immigration declined to 595,000 people—the lowest level since the 1980s, according to one oft-cited study. It’s a level that leaves even some members of the Trump administration’s inner circle concerned that immigration levels are too low to support economic growth.
Of course, one needn’t be a new immigrant to launch a high-flying startup. Many of the successful founders on our lists above immigrated years or decades before their companies took flight. The lists, overall, include immigrants who arrived in the U.S. as children as well as those who came later, commonly to attend universities.
Lastly, we should keep in mind that immigration, like unicorns, venture funding and startup valuations, has historically been rather cyclical. The issues confronting immigrant founders today may very well fade away or morph into something completely different in coming years.