With Billions To Burn, SoftBank Goes Window Shopping For WeWork

Funding rumors are swirling around office co-working space company WeWork, which is the target of a possible $1 billion investment from the newly created $100 billion SoftBank Vision Fund, according to The Wall Street Journal. The potential financing is notable not only for its massive size, but also because it would be WeWork’s fourth funding in three years to top $100 million—and one of the first from SoftBank’s unique investment vehicle.

WeWork

Founded in 2010, the New York-based WeWork rents office space in big cities, overhauls them with trendy designs and custom workplaces, then sublets to small & midsize companies and individuals through several different membership plans. The company has been the topic of much buzz in recent years; its business model is quite unique, and its valuation has skyrocketed, reaching an eye-popping $16.9 billion last year with a $690 million round. WeWork first reached unicorn status in early 2014 when it was valued at nearly $1.5 billion with a $150 million financing. Its valuation reached $5 billion less than a year later, and hit $10 billion by the middle of 2015.

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WeWork’s outsized valuation is one thing that’s giving SoftBank pause; executives at the Japanese investor have wondered whether the company is overvalued and whether a brick-and-mortar-focused business strays too far from the fund’s tech-based thesis, per the WSJ. WeWork would likely apply much of the $1 billion investment to expand beyond the 19 US cities and 13 countries in which it currently operates office spaces, a use that’s arguably quite a bit different from the private equity vehicle’s focus on the global technology sector.

It remains to be seen whether the financing will pan out. If it happens, it wouldn’t be until later in February, when the SoftBank fund is expected to close, according to the report.

In the meantime, we’re pondering a few questions: Will WeWork’s valuation remain flat, or will it climb even higher? Why is the company raising such huge rounds within just months of each other? And, of course, which company will SoftBank back next?

Get more information about WeWork, such as its financing history, investors and management, in its free profile.

Article by PitchBook

Article by Dana Olsen – PitchBook