US-based working space operator WeWork is discussing a multi-billion-dollar investment with telecoms and internet conglomerate SoftBank, the Wall Street Journal reported yesterday citing people familiar with the matter.
If the deal closes, SoftBank would lead the transaction through its Vision Fund.
Founded in 2010, WeWork manages a network of 379 co-working spaces, stretching across 69 cities in 24 countries. It targets a wide range of clients, from freelancers and startups to established companies, offering hot or dedicated desks, private offices and custom buildouts.
WeWork is reportedly targeting a $35bn valuation for its latest funding round, news publication Business Insider quoted Rajeev Misra, head of the Vision Fund, as saying. The Wall Street Journal’s sources estimated the new round could drive the valuation as high as $40bn.
The figure would make WeWork one of the most valuable private, venture-backed businesses behind financial services provider Ant Financial and ride hailing company Uber.
SoftBank and its Vision Fund previously invested a total of $4.4bn in WeWork in August 2017, including $3bn in a mix of primary and secondary shares and $1.4bn for three regional subsidiaries in WeWork China, WeWork Japan and WeWork Pacific.
SoftBank and Hony Capital invested $500m in WeWork China in July 2017, though it is unclear whether the former’s share of the funding will be rolled up into the $1.4bn investment.
WeWork had previously raised $2.45bn in funding, not including the $500m WeWork China deal. SoftBank invested $300m at a reported $17bn valuation in March 2017, before unnamed investors supplied a $760m series G round in July 2017 at a $20bn valuation.
Hotel chain Shanghai Jin Jiang International Hotels and conglomerate Legend Holdings were among the backers in a $690m series F round, which closed in 2016 with backing from Hony Capital and an unnamed US-based family office.
WeWork’s shareholders also include financial services providers Fidelity Management and Research, JP Morgan Investment Management, and Goldman Sachs, investment firm T. Rowe Price, venture capital firm Benchmark and clients of Wellington Management Company.
Misra said: “A year ago, we were told that WeWork was overvalued at $17bn for real estate. Guess what, they are looking to raise capital at $35bn today. Maybe it is overvalued, but I believe they will be a $100 billion company in the next few years.”