The list of disruptors struggling to live up to their hype or burning through cash at an alarming rate with no obvious path to profitability is growing increasingly long. 


Uber’s losses make WeWork’s look modest – more than $5bn in the second quarter alone – and many of the fastest-growing online retailers are also racking up staggering losses. Online furniture retailer Wayfair has just reported losses of $270m for the third quarter, up 80% on last year. Closer to home, celebrated disruptor Deliveroo reported an annual loss of £232m last month, and many challenger banks, most notably Metro Bank, look more challenged than challenger.

In real estate, WeWork isn’t the only disruptor in trouble – or even the only co-working disruptor in trouble. Clubhouse and Central Working have both fallen into administration recently, and as we reveal this week, Hong Kong-based co-working start-up Campfire has retreated from the UK market, while Prospect Business Centres has had to close one of its centres.

Some high-profile proptech firms have also failed to live up to expectations. Various subsidiaries of BrickVest, the investment platform that allows investors to trade shares in commercial properties, fell into administration this week.

It remains to be seen exactly how all this will play out – but one thing is certain. Those who view disruptors’ difficulties as a reason to stick to old ways of doing things are destined to fail: occupiers won’t abandon flexible space in favour of long leases; consumers won’t all start turning their backs on online retail; and tech won’t stop changing the world of real estate investment.

The challenges facing some of the disruptors should be viewed by traditional players as an opportunity to up their game and adapt their offer to the changing market. As Bill Hughes, L&G’s head of real assets, puts it in his column this week: “Modernisation may have been forced on the office sector but those willing to adapt are well placed to disrupt the disruptors.”

To be successful, disruptors will also have to change. Too many are spending too much money getting customers through the door and aren’t paying enough attention to what they will get back. Some have already learnt this lesson. Fintech property lender LendInvest turned away from the peer-to-peer market a couple of years ago in favour of other funding sources, including institutional investors and retail bonds. It realised that the economics of targeting private investors through Google and with ads on the London Underground didn’t add up.

Others will also have to rethink how they operate. Investors will eventually lose patience with companies that make ever-increasing losses, even if they are continuing to grow market share. Judging by SoftBank’s earnings presentation last week, its patience with WeWork has run out, despite its multi-billion-dollar rescue deal.

The question is whether WeWork and other loss-making unicorns can turn a profit when they put their minds to it. Amazon may be making stonking profits today after years of losses, but other examples are few and far between.