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WeWork Raises Massive $4.4 Billion From SoftBank And Fund

WeWork - the seven-year-old co-working, and co-living startup - announced yesterday that it is set to raise $4.4 billion from SoftBank and its $93 billion Vision Fund. The investment values WeWork at about $20 billion, a slight jump from it $17 billion valuation that WeWork earned when it raised its $430 million Series F round last March. Here is an overview of the deal:

  • $3 billion of the total investment will go directly to WeWork
  • $1.4 billion of the total investment will go into expanding its operations in China and Asia. Particularly, in three newly created companies (previously announced), each controlled and managed by local WeWork management teams, which will fund WeWork’s expansion in China (WeWork China), Japan (WeWork Japan) and Southeast Asia and Korea (WeWork Pacific), respectively.
  • Two SoftBank directors, Ronald D. Fisher and Mark Schwartz, will join WeWork’s board, as part of the deal.

Softbank has been on an investment spree over the past year. Here is from NYT:

"The news reflects the enormous financial firepower that SoftBank has amassed over the past year — and proved willing to spend. Softbank’s founder, Masayoshi Son, has never been shy about his ambition to seize upon the future of technology through investments and acquisitions.

That is why he was willing to buy ARM Holdings, the British semiconductor designer whose chips underpin modern smartphones, for $32 billion last year. And why he has invested billions of dollars in ride-hailing companies around the world.

And it is why he has raised $93 billion so far for the Vision Fund, an investment behemoth whose backers include the kingdoms of Saudi Arabia and Abu Dhabi as well as Apple and Qualcomm. With those resources, Mr. Son is now able to deploy more money in one deal than most venture capital firms can dream of spending in years."

While announcing the deal, Masayoshi Son, Chairman & CEO of SoftBank Group Corp said: “WeWork is leveraging the latest technologies and its own proprietary data systems to radically transform the way people work,”. He added: Adam’s unique vision and talented team have created a sharing platform that offers maximum flexibility and opportunity to creators of all types, from young entrepreneurs to large multinational companies. We are thrilled to support WeWork as they expand across markets and geographies and unleash a new wave of productivity around the world.”

Founded in New York in 2010 by Adam Neumann and Miguel McKelvey, WeWork now claims to have 150,000 members across its 160 locations around the world and is expected to generate $1 billion in revenue this year. The users pay for the shared office, conference room, and mail handling. The company has also launched a co-living wing called WeLive. Previously, the company has raised $1 billion from investors. Past investors include Goldman Sachs, JPMorgan Chase, and the venture capital firm Benchmark.

“Masayoshi Son is a visionary business leader and we are humbled by this strong endorsement of our mission and purpose,” said Adam Neumann, Co-Founder and CEO of WeWork. “This support from SoftBank and the Vision Fund will provide even more opportunities for creators as we set out to humanize the way people work and live.”

Lead image: WeWork co-founders | Image by Business Insider

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