Japanese conglomerate SoftBank Group is said to be in talks to spend between US$15 billion and US$20 billion to acquire a majority stake in global co-working giant WeWork, said WSJ on Tuesday, citing anonymous sources. This would be a departure from the Vision Fund’s normal approach of taking non-controlling stakes.
SoftBank is already a WeWork investor, owning close to 20% of the New York-based company. To date, the co-working firm has raised US$9.1 billion in financing, according to CrunchBase data. In June this year, WeWork was said to be raising more funds at a US$35 billion valuation. Other investors include Hony Capital, Goldman Sachs, and others.
SoftBank is one of the biggest cheque writers in the technology startup space, having invested in some of the highest-valued tech companies like Alibaba, Uber, and Didi. Its Vision Fund, which the money for WeWork will likely come out of, if the deal goes through, has secured nearly US$100 billion.
While WeWork is not exactly a tech startup, – its key selling point is still providing users with office space – it is part and parcel of a global entrepreneurship boom. Aside from its real estate offerings, it has also ventured into other sectors, like running a coding bootcamp, for example. Currently, it operates 469 spaces in 90 cities, according to its website.
The huge amount of capital it’s raising points to an ambitious global expansion plan, which includes buying and renting office spaces to then lease out to small businesses. The company could also be using this new capital to acquire smaller co-working space networks in consolidation efforts.
Editor: Nadine Freischlad