New York-based WeWork said it will receive $3 billion in funding, in yet another investment from its already biggest financier Softbank Group Corp. Earlier in August, Softbank had injected $1 billion into WeWork in the form of a convertible note.

The latest round of financing comes in the form of a warrant, which allows Softbank to buy shares of WeWork at $110 or above before September 2019, depending on whether the company is acquired or publically listed. According to WeWork, the deal values the company at $42 billion.

wework softbank funding
Image courtesy: Pixabay

According to Financial Times, the first tranche of $1.5 billion will be handed over on January 15, 2019, while the rest will be given three months later.

Though WeWork is primarily a provider of shared workspaces for technology startups, a third of its revenue comes from its enterprise products made for corporate clients.

Softbank’s Vision Fund had last year invested $4.4 billion in the company, making the Japanese multinational holding conglomerate its biggest backer. Softbank also holds two board seats in WeWork.

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Since April, WeWork has been publically announcing its quarterly results, though it is still a privately held company. Over the past three quarters, the company has reported losses worth $1.22 billion on a revenue of $1.25 billion. According to company filings, last year it lost $933 million, despite reporting a top line of $886 million.

Though the company is yet to turn any profits, Softbank seems highly optimistic about it. If WeWork does, start turning in profits, Softbank would become the biggest beneficiary.

 

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