Theo Wargo/Getty Images WeWork CEO Adam Neumann.
- WeWork CEO Adam Neumann has set up a "hardship" fund through his family office for employees of Faraday Grid, the UK energy startup which collapsed into administration earlier this month.
- Neumann had invested $30 million in the startup in January through his family office, but the startup collapsed the same day that WeWork filed to go public.
- Faraday Grid had been developing transformer technology, but ran out of money after racking up a monthly burn rate of $2.4 million.
- Two sources with knowledge of the matter said Neumann's family office had stepped in to offer assistance to former employees who were out of a job and might be struggling financially.
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WeWork CEO Adam Neumann has set up a "hardship" fund through his family office for former employees at Faraday Grid, the UK energy startup which fell into administration this month.
Administration is the UK's approximate equivalent to bankruptcy.
Two sources told Business Insider that Neumann's family office, 166 2nd, had written to offer assistance to employees who might be financially struggling after Faraday's collapse. Neumann had invested $30 million in the energy technology startup in January through the 166 2nd entity.
Faraday Grid attracted considerable attention both for Neumann's investment and its promise of new, innovative infrastructure to modernize the UK's power grid and boost the use of renewable energy. When he invested in January, Neumann said: "Faraday Grid will fundamentally change the way we access and use energy in the future."
But only five months later, Faraday Grid's board would oust CEO Andrew Scobie and install new leadership. And two months after that, the firm would run out of money and announce its administration the same day that WeWork would file for an expected multibillion-dollar IPO. A third source with knowledge of the matter recentlytold Business Insider that Faraday Grid had been burning through $2.4 million a month.
Facebook/Faraday Grid
Faraday Grid's former CEO Andrew Scobie.
The startup could still live on if administrators Grant Thornton successfully restructure the company or find a buyer. Earlier this month, the firm said 45 employees had lost their jobs.
According to one former employee, 166 2nd wrote to the pool of employees to offer financial help through a dedicated "relief" fund. 166 2nd did not specify the size of the fund but, according to the source, some employees are who have applied for help are already receiving checks. The source said 166 2nd had also offered help to overseas employees whose visas are sponsored by Faraday Grid.
"166 have been really decent," one former employee said. "They've taken responsibility for the remaining staff and that's admirable."
The source added that Neumann's sister, Adi Neumann, had also visited Faraday Grid's head offices in Edinburgh, Scotland in March and met former CEO Scobie and other senior staff.
The source and another former employee described how the firm had spent lavishly in the runup to its collapse, both to impress Adi Neumann and to fuel a rapid expansion. Between January and June, Faraday Grid announced its expansion to the US, a new chief systems architect, comms chief, two regulatory bosses, a CFO, general counsel, COO, VP of engineering, and a new innovation centre in the Czech Republic.
A spokeswoman for WeWork declined to comment.