Japan’s Softbank is on investment spree it seems as Masayoshi Son led venture fund is exploring to buy a majority stake of up to 50% in US co-working office space provider WeWork Cos, according to a recent report from The Wall Street Journal (WSJ).
The possible investment by Softbank in WeWork could go anything between $15 billion and $20 billion and would be sourced from SoftBank’s Vision Fund, said the WSJ report.
However, the investment discussions are fluid and there is no certainty of deal closure, said the report citing some of the people privy to the development.
An earlier report by WSJ in June also said that SoftBank and WeWork were in discussion for a smaller investment that could value WeWork at up to massive $40 billion.
The $92 billion Softbank Vision Fund, which is backed largely by Saudi Arabia and Abu Dhabi wealth funds as well as by SoftBank, already owns nearly 20% of WeWork after Softbank group invested whopping $4.4 billion in WeWork in equity funding round raised in August last year. That funding valued WeWork at $20 billion.
Meanwhile in Tokyo, SoftBank shares has fell by 5% on Wednesday trading due to the news of the potential WeWork investment, which according to the traders was negative for SoftBank, which has substantial exposure to the technology sector whose shares have been under pressure.
If the deal goes through then it would be one of the largest and important deals of the past decade’s startup boom. SoftBank in January completed the biggest investment in a venture-backed startup, paying $7.7 billion for a 15% stake in Uber Technologies Inc. More than 160 private companies backed by venture capital have valuations of more than $1 billion, up from just a handful in 2010.
Founded in 2010 by Adam Neumann and Miguel McKelvey, WeWork to help create the world where people work to make a living, not just a living. It offers warehouse-style shared workspace to smaller companies, primarily tech startups. WeWork members are creators who run the gamut from entrepreneurs, freelancers, and startups, to artists, small businesses and even divisions of large corporations.
According to WeWork, since its launch in New York seven years ago it has grown into a network with more than 150,000 members at some 160 locations around the world.
Just a few days back, the co-working space giant had launched ‘WeWork Labs’ in India to help early-stage startups in the country get access to investment, resources and mentorship from its global network of members. The company started with a pilot WeWork Labs in India at the company’s Gurugram facility and eight startups are already a part of it.
Late last month, SoftBank Vision Fund has invested in India’s hotel aggregator, Oyo Hotels’s massive $1 billion funding round. Softbank is already an investor in Oyo prior to this round.
This July, it was also reported that SoftBank will launch new mobile digital payments service for Japan, at the end of 2018. The upcoming payment service will launched in collaboration with its Indian investee startup PayTM.
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