Telecommunications group SoftBank has begun talks to acquire a majority stake in US-based workspace provider and portfolio company WeWork for up to $20bn, the Wall Street Journal reported yesterday.
SoftBank already owns almost 20% of WeWork but is considering investing between $15bn and $20bn through its Vision Fund, people familiar with the discussions told the WSJ.
The Financial Times pegged the upper end of the investment at $10bn today and suggested the money would be provided over a two-year period, citing people familiar with the matter.
WeWork runs a network of co-working spaces spanning more than 430 locations worldwide as of August this year. Users can rent by the desk or room and workers get access to high-grade printers and office equipment as well as meeting rooms.
The workspaces are intended to be the first step in a larger long-term business plan that will involve WeWork managing apartments and leisure facilities, and it opened an elementary school in New York last month.
The company has so far raised $9.5bn in debt and equity financing, including $1bn in convertible note financing from SoftBank in August this year, two months after reports suggested the corporate was mulling an investment that would value WeWork at $35bn to $40bn.
SoftBank first invested in WeWork in March 2017, providing $300m at a reported $17bn valuation, before joining Vision Fund to acquire $3bn of new and secondary shares in July 2017 while supplying $1.4bn for subsidiaries in China, Japan and the Asia Pacific region.
WeWork had already closed a $690m series F round featuring hotel operator Shanghai Jin Jiang International, private equity firm Hony Capital and Legend Capital, the venture capital firm formed by conglomerate Legend Holdings, in 2016.
The company’s earlier backers include Fidelity Management and Research, JP Morgan Investment Management, T. Rowe Price, Goldman Sachs, Benchmark and clients of Wellington Management.
