The Real Deal New York

Softbank in talks to take a majority stake in WeWork: report

The Japanese firm is considering an investment as much as $20B
October 10, 2018 08:50AM

Softbank CEO Masayoshi Son and WeWork CEO Adam Neumann (Credit: Getty Images)

SoftBank is in discussions to take a majority stake in Adam Neumann’s co-working firm WeWork, which could amount to an investment as high as $20 billion, a new report claims.

If a deal were to materialize, the money would reportedly come from SoftBank’s Vision Fund, according to the Wall Street Journal. SoftBank, an almost $100 billion fund backed by Saudi Arabia and Abu Dhabi sovereign wealth funds, has invested over $5 billion in WeWork so far, propelling it to the top of the co-working heap.

Its stake in WeWork, already nearly 20 percent, has helped boost the coworking giant’s valuation to over $20 billion, since it opened its first office space at 154 Grand Street in 2010. In eight years, WeWork has grown to a workspace company with more than 265,000 desks in 287 building across the globe.

Last month, WeWork became the largest office leaseholder in Manhattan, surpassing JPMorgan Chase with 5.3 million square feet leased. As of the time of the announcement, the co-working giant had 60 locations in New York City, with 50 in Manhattan.

SoftBank and WeWork held discussions earlier this summer that would have valued the company at up to $40 billion, according to a June report in the Journal.

CEO Adam Neumann, who has the largest stake in the company, has long marketed WeWork as a tech firm with a real estate bend, claiming its real value is in integrating people and businesses into sustainable communities.

Despite its high valuation, skeptics point to WeWork’s growing losses — and exposure to relatively volatile industries like real estate — as cause for concern. In the first six months of the year, WeWork posted losses of $723 million, though revenue doubled during that time to $763 million. Beyond co-working, WeWork has also launched kindergartens, gyms, co-living businesses and brokerage advisory services. [WSJ] — David Jeans