SoftBank planned to invest $16B into WeWork. That number just got way smaller.

Saudi and Abu Dhabi backers didn't have the appetite for risk, interest in takeover of co-working firm: FT

TRD NATIONAL /
Jan.January 07, 2019 04:00 PM

Masayoshi Son (left) and Adam Neumann (Credit: Getty Images)

SoftBank has slashed a potential $16 billion investment in WeWork to $2 billion, after the Japanese megafund’s backers expressed concern over its free flow of capital to the flexible office space company.

Backed by the sovereign wealth funds of Saudi Arabia and Abu Dhabi, and led by Masayoshi Son, SoftBank’s $100 billion Vision Fund was expected to invest another $16 billion in WeWork over the coming years. But in December, reports surfaced that its backers had balked at the massive investment in WeWork, which is yet to turn a profit and last year was expected to lose $2 billion.

On Monday, citing sources, the Financial Times reported that the funding is expected to be significantly reduced to $2 billion, and would not come from the Vision Fund, but from another arm of Softbank. The funding could reportedly be announced this week.

The scaled-back investment would also mean that SoftBank will not take a majority stake in WeWork, as was previously rumored. If the $16 billion investment had gone ahead it would have been the largest investment ever in a tech startup and brought the total investment in WeWork by SoftBank and affiliates to more than $24 billion.

WeWork declined to comment. SoftBank did not immediately respond to a request for comment.

To date, the Vision Fund has committed $8.4 billion to WeWork, including a $3 billion stake announced in November. That funding round boosted WeWork’s valuation to $45 billion.

The investor caution also reflects uncertainty in the technology market, as industry stocks have declined amid a sell-off in equity markets. In November, Zillow lost almost $2 billion overnight in as investors offloaded stock. [FT] — David Jeans


Related Articles

arrow_forward_ios
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

WeWork’s side businesses are fizzling

WeWork’s side businesses are fizzling
Sarah Pontius (Credit: Union College)

Another head rolls at WeWork

Another head rolls at WeWork
Adam Neumann and “Billion Dollar Loser” (Getty; Amazon)

In “Billion Dollar Loser,” WeWork’s “epic rise” and Adam Neumann’s quiet enablers

In “Billion Dollar Loser,” WeWork’s “epic rise” and Adam Neumann’s quiet enablers
Reeves Wiedeman (Photos via Amazon; Reeves Wiedeman; iStock)

The REInterview: Reeves Wiedeman on the manic rise and fall of Adam Neumann and WeWork

The REInterview: Reeves Wiedeman on the manic rise and fall of Adam Neumann and WeWork
Craig Solomon

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism

The REInterview: Square Mile’s Craig Solomon on his big bet on studio space, today’s capital stack and the dangers of socialism
Adam Neumann and Marcelo Claure (Getty)

Poof! Adam Neumann’s $185M WeWork gig disappears

Poof! Adam Neumann’s $185M WeWork gig disappears
WeWork CEO Sandeep Mathrani (Getty; iStock)

We Company changes name back to WeWork

We Company changes name back to WeWork
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...