We Company, the US-based workspace provider whose largest investor is telecommunications and internet group SoftBank, filed today to raise up to $1bn in an initial public offering.
The company hopes to eventually raise $3bn to $4bn from the offering, people briefed on the plans told the Financial Times. It has not decided the market on which it plans to float.
Founded in 2010 as WeWork, We Company has built a network of more than 520 co-working spaces spanning 111 cities across 29 countries, offering desks, offices and office suites together with free printers, office equipment and ultra-fast broadband.
The company rebranded in January this year to reflect its intention to expand into areas such as accommodation, education and financial services, at the same time as it raised $2bn from SoftBank at a $47bn valuation.
We Company more than doubled revenue year on year to more than $1.53bn in the first six months of 2019 while its net loss widened from $723m to $905m in the same period. It made a net loss of almost $1.93bn over the course of 2018.
The offering will consist of class A shares, with company founder and CEO Adam Neumann the only holder of class B and C shares, which have 20 times the voting power. He owns almost 112 million class B shares, nearly 1.1 million class C’s and about 2.4 million class A’s.
SoftBank and its Vision Fund collectively own almost 114 million shares, and the next largest investors are venture capital firm Benchmark (32.6 million) and investment banking firm JP Morgan (18.5 million).
The IPO filing states that SoftBank and its affiliates have committed almost $10.7bn to We Company and subsidiaries in China, Japan and the Asia Pacific region, in addition to $1.7bn through a Vision Fund affiliate known as SBWW Investments. It is also financing We Company’s Creator Fund.
We Company has added $124m in funding since the January round, according to securities filings. SoftBank had provided $1bn of convertible note financing in August 2018 before agreeing in November to supply $3bn of warrant financing during 2019.
SoftBank and Vision Fund had combined to buy $3bn of primary and secondary shares in WeWork in an August 2017 deal, in addition to investing $1.4bn in three regional subsidiaries.
The company had raised $760m in series G funding from unnamed investors at a $20bn valuation the previous month, taking its total funding at the time to about $2.45bn. SoftBank first invested in the company in March 2017 when it provided $300m.
The deal followed a $690m series F round featuring hotel chain Shanghai Jin Jiang International, conglomerate Legend Holdings and private equity firm Hony Capital that closed in 2016.
We Company’s earlier backers include Benchmark, investment and financial services group Fidelity Management and Research, JP Morgan Investment Management, Goldman Sachs, T. Rowe Price and clients of Wellington Management Company.
JP Morgan is also one of the joint bookrunning managers for the IPO, along with Goldman Sachs, BofA Merrill Lynch, Barclays, Citigroup, Credit Suisse, HSBC, UBS Investment Bank and Wells Fargo Securities.
