Silicon Valley is trying to blame WeWork for its demise but itself. Knives are designed for the most controversial investors of Silicon Valley. WeWork’s valuation plummeted and its CEO, Adam Neumann, was dismissed on Tuesday, which caused SoftBank to suffer new setbacks. The name of Softbank has become synonymous with whether or not Silicon Valley is indeed in the financial bubble. WeWork’s largest external shareholder, Softbank, is one of the thousands of investors who support Silicon Valley start-ups. However, no company can reshape the entire technology investment field like Softbank, so its fare is of paramount importance in Silicon Valley.
Three years ago, Softbank raised US$100 billion (a huge sum of money) from sources such as Saudi Arabia to invest in start-ups. Then, it began using a checkbook known as Vision Fund to bring its purchases to the most iconic new companies in the technology industry, including Slack, Uber, and WeWork, whose prices often sneaked on competitors’ venture capitalists. WeWork has become a crown jewel along with SoftBank’s cash driving WeWork’s market capitalization to nearly US$50 billion, while the high-expected IPO is expected to start before the end of the year. However, as the company prepares to go public in recent weeks, WeWork begins to implode until Neumann leaves the company on Tuesday. Now, in the bleak IPO ruins, Silicon Valley is trying to explain what happened and who should be blamed. So far, it has not included itself.
On Tuesday, external observers and sources related to WeWork made every effort to describe WeWork’s dramatic as a SoftBank issue rather than a technical industry issue. Nevertheless, Softbank may be an embellishment of the trend. Almost all Silicon Valley investors lament the growth of founders with unrestrained power privately, young companies flooded with funds, and weak moral standards, all played a role in the downfall of WeWork. The investment in WeWork accounts for about 4% of the SoftBank’s Vision Fund, which is only behind six IPOs. Some of them such as Guardant Health has performed well and has doubled its value since its launch. However, high-profile consumer brands like WeWork tend to attract attention. Due to the size of Softbank, its success or failure is considered to be a long-term leader in the technology industry. When Softbank began investing US$100 billion in Silicon Valley, it gradually took over the dominance of every Twitter debate, or quietly talked in the corridors of technical power. This expressed both the arrogance of Silicon Valley and its vibrant ambition.