Categories Finance, U.S. Markets News

Softbank pours another $3 billion into WeWork

New York-based WeWork said it will receive $3 billion in funding, in yet another investment from its already biggest financier Softbank Group Corp. Earlier in August, Softbank had injected $1 billion into WeWork in the form of a convertible note.

The latest round of financing comes in the form of a warrant, which allows Softbank to buy shares of WeWork at $110 or above before September 2019, depending on whether the company is acquired or publically listed. According to WeWork, the deal values the company at $42 billion.

wework softbank funding
Image courtesy: Pixabay

According to Financial Times, the first tranche of $1.5 billion will be handed over on January 15, 2019, while the rest will be given three months later.

Though WeWork is primarily a provider of shared workspaces for technology startups, a third of its revenue comes from its enterprise products made for corporate clients.

Softbank’s Vision Fund had last year invested $4.4 billion in the company, making the Japanese multinational holding conglomerate its biggest backer. Softbank also holds two board seats in WeWork.

SoftBank plans IPO for Japanese mobile unit

Since April, WeWork has been publically announcing its quarterly results, though it is still a privately held company. Over the past three quarters, the company has reported losses worth $1.22 billion on a revenue of $1.25 billion. According to company filings, last year it lost $933 million, despite reporting a top line of $886 million.

Though the company is yet to turn any profits, Softbank seems highly optimistic about it. If WeWork does, start turning in profits, Softbank would become the biggest beneficiary.

 

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