Telecommunications firm SoftBank’s Vision Fund has agreed to invest another $3bn in one of its biggest portfolio companies, US-based workspace provider WeWork, it revealed yesterday through an investor presentation.
WeWork will receive the first $1.5bn in January 2019 and the other half in April, and the financing will be supplied in the form of warrants that give Vision Fund the opportunity to buy WeWork stock at $110 a share or higher by September the same year.
The exact price will depend on whether WeWork raises $1bn in funding or more or goes public by September but will value the company at a minimum of $42bn, according to Bloomberg.
Founded in 2010, WeWork oversees a network of flexible workspaces in more than 30 countries across five continents which are leased from landlords and rented out to businesses or individuals by the desk or office. It is also branching out into managing housing, leisure and educational spaces.
Reports last month suggested SoftBank, which already owned a 20% share of the company, was exploring the option of acquiring a majority stake in WeWork through an investment of between $15bn and $20bn. The warrants take WeWork’s overall debt and equity financing to $12.5bn.
WeWork raised $300m from SoftBank in March 2017 at a $17bn valuation, and the corporate invested alongside Vision Fund in a $3bn primary and secondary share deal four months later, the two also providing another $1.4bn for China, Japan and Asia Pacific-based subsidiaries.
SoftBank subsequently provided an additional $1bn in a convertible note round in August this year that increased its stake to the 20% mark.
Hotel operator Shanghai Jin Jiang International had joined Legend Capital, the venture capital firm spun off from conglomerate Legend Holdings, and private equity firm Hony Capital for WeWork’s $690m series F round, which closed in 2016.
Investment and financial services group Fidelity Management and Research and investment banks JP Morgan Investment Management, T. Rowe Price and Goldman Sachs are among the company’s earlier backers, as are Benchmark and clients of Wellington Management.
Photo courtesy of WeWork Companies Inc.
