Billions More For WeWork 💸
A plea for wall moneyWe can't give you $16B...so here's $2B instead
SoftBank was reportedly planning a $16 billion investment in co-working startup WeWork, which would have given them a controlling stake in the company. Instead it seems the investment has been dropped to $2 billion after SoftBank investors tightened their wallets. WeWork has raised $10.6 billion in total and is valued at $42 billion.
What's a 'Softbank'?
SoftBank is a Japanese conglomerate recently known for making massive investments in tech startups. Besides investing a total of $9 billion in WeWork, SoftBank has also invested $300 million in Wag (dog walking startup), led a $535 million round in DoorDash (food delivery), and invested $1.2 billion in Uber.
BIG MONEY MOVES:
NY Times: SoftBank Bets Big on WeWork. Again.
Fast Company: Confirmed: SoftBank to invest $2 billion more in WeWork
Some believe SoftBank is successfully continuing in its long line of massive tech investments. They highlight that the firm is investing in innovative companies and that some are bound to be successful. While they acknowledge that WeWork is still losing massive amounts of money, they believe that SoftBank's support will lead the company to success.
Others believe SoftBank is taking big risks on a startup that is losing literally over $1 billion a year. They note that SoftBank's largest investment fund is backed by Saudi Arabia and Abu Dhabi and the fact that SoftBank's investors forced them into a smaller deal is a bad sign for WeWork.
Will WeWork survive?
WeWork has roughly 300 locations. Only 25% of the tenants in these locations are mature "enterprises." This could be a huge issue for them if their startup tenant-base departs in groves in the next stock market downturn, which may be imminent given the recent stock market turmoil.
We work at WeWork...it's freezing
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