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SoftBank moves on WeWork
Posted on Wednesday, 10 October 2018 08:40
SoftBank is believed to be moving further into the shared office space with plans to turn a 20.0 per cent equity interest in loss-making WeWork into a majority stake via new financing deal the Wall Street Journal suggested could be worth USD 15.00 billion to USD 20.00 billion.
People familiar with the matter told the publication, which was the first to report the funding discussions, the money is likely to come from the Japanese conglomerate’s USD 92.00 billion Vision Fund.
If this is the case, it would not be wholly unexpected as the technology investment unit took almost a fifth of the co-working office operator last year for USD 3.00 billion.
The deal at the time also included the injection of USD 1.40 billion in three newly-created regional subsidiaries formed to help WeWork expand in Southeast Asia, as well as in Japan and China.
Talks are still ongoing and the pricing and other details are not set in stone but, according to reports published earlier this summer regarding an additional equity commitment from Softbank, if an agreement is reached then WeWork could be valued at USD 35.00 billion to USD 40.00 billion.
Furthermore, if completed, the deal would be one of the largest private equity or venture or development capital investments in an unlisted company on record, according to Zephyr, the M&A database published by Bureau van Dijk.
Within the context of financing targeting the technology sector, it would certainly surpass the USD 14.00 billion and USD 7.75 billion rounds by Ant Financial and Uber Technologies, respectively, both of which closed this calendar year.
Interestingly, SoftBank took part in the US ride-hailing platform’s latest funding round, and it also works closely with WeWork as some of the conglomerate’s units use the startup’s shared office spaces.
Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities, told Bloomberg the investment would be an interesting litmus test for the Tokyo-headquartered powerhouse’s balance sheet considering that adding a loss-making business “would be a short-term negative”.
© Zephus Ltd