WeWork Co. will reportedly be getting another US$1 billion from the Japanese multinational firm Softbank Group Corp. and the investment will be in the form of convertible notes. Sources claim that WeWork’s expenses are increasing as its business is gaining momentum, on the grounds of which Softbank is more than willing to fulfil its growing cash requirements.
Records show that as of June 30, WeWork held about US$1.9 billion cash on hand and Softbank already invested close to US$ 5 billion in shared workspace provider during last summer and earlier this year, to expand its China-based subsidiary. This year, WeWork has released some of its financial information informally, which include the figures for last year and the first quarter of this year.
WeWork’s President and CFO, Artie Minson said the company’s sales are rising consistently whereas its construction costs per desk are going down, giving them the confidence to aim for faster growth. Subsequently, major financial institutions are showing significant interest in WeWork equity, Minson added.
According to CNBC, WeWork is renowned to provide office space amid an environment remnant of shared services – right from individuals to companies incorporating a workforce over 1,000 people.
Citing sources familiar with the knowledge of the matter, if the rising interest of investors in WeWork leads to a new round of funding of at least US$1 billion or if it goes public, Softbank’s loan to the company would be converted into equity. Depending on which investor will lead the purported round, the per share prices could vary, with Softbank poised to receive a minimum $110 per share if another firm becomes the majority investor, taking the company valuation to US$42 billion.
WeWork mentioned in a statement that it has acquired two small general contracting businesses, one in New York itself and another in London, to expand the in-house design and construction process. The company also went on to claim that over the next 12 months, it could surpass $1.8 billion in sales.