Internet and telecommunications group SoftBank is set to invest at least $750m in the upcoming initial public offering of US-based workspace provider We Company, the Wall Street Journal reported on Friday.
SoftBank is set to buy about 25% of the shares issued in an IPO expected to raise at least $3bn at a valuation of $15bn to $20bn, according to people familiar with the matter.
We Company is best known for co-working space provider WeWork but it oversees a range of sister companies intended to cover bases such as living and education. It made a $904m net loss in the first six months of 2019 from almost $1.54bn in revenue.
The company is set to float on the Nasdaq Global Select Market and is expected to set terms for the offering this week. It publicly filed to go public last month, setting a $1bn placeholder target.
The mooted valuation in the offering marks a steep decline from We Company’s last funding round in January this year when SoftBank invested $2bn in a $47bn valuation, though it raised $19.5m from 18 undisclosed investors last week according to a securities filing.
SoftBank is already We Company’s largest investor, holding almost 114 million class A shares, followed by Benchmark (32.6 million) and JP Morgan (18.5 million). We Company founder and CEO Adam Neumann has 2.4 million class A shares and 112 million class B’s.
We Company’s other investors include Legend Capital, the venture capital firm set up by conglomerate Legend Holdings, as well as hotel chain Shanghai Jin Jiang International, Fidelity Management and Research, Hony Capital, T. Rowe Price, Goldman Sachs and clients of Wellington Management.
JP Morgan, Goldman Sachs, BofA Merrill Lynch, Barclays, Citigroup, Credit Suisse, HSBC, UBS Investment Bank and Wells Fargo Securities have been appointed joint bookrunning managers for the IPO, which has 31 underwriters altogether.
