SoftBank to invest additional two billion U.S. dollars in WeWork: sources
SoftBank Group Corp will inject another two billion U.S. dollars in WeWork Cos Inc. this year, bringing the Japanese conglomerate's total investment in the office space provider to more than ten billion dollars, according to two people familiar with the matter.
The new investment will value WeWork at 47 billion dollars, one of the sources said. SoftBank will separately convert previously purchased warrants into equity at a valuation of 20 billion dollars, the source added.
The new investment extending its minority stake, which could be announced as early as Tuesday, will not include any money from SoftBank's Vision Fund, according to the second source.
Saudi Arabia is the biggest investor in The Vision Fund, which was a major backer of SoftBank's early investments in WeWork and holds stakes in other technology companies, including ride-hailing service Uber Technologies Inc.
The new round will bring total SoftBank investments in money-losing WeWork to about 10.4 billion dollars and comes following declines in global stock markets which have hurt the value of technology shares.
The WeWork investment comes after SoftBank raised 23.5 billion U.S. dollars last month listing its domestic telco, SoftBank Corp, in Japan's biggest-ever IPO. Shares fell 15 percent in the unit's trading debut last month, erasing nine billion dollars in value and are currently trading five percent below the IPO price.
The SoftBank group is publicly bullish on the merit of the WeWork investment, with SoftBank Corp CEO Ken Miyauchi saying last month that Japan, where SoftBank Corp and WeWork have a joint venture, is the startup's fastest-growing market.
WeWork has been treated with skepticism by some Silicon Valley investors who see it as an over-valued real estate play vulnerable to a property market downturn.
In August, WeWork secured one billion dollars from SoftBank in the form of a convertible note followed by three billion dollars in November in the form of equity warrants.
The Financial Times reported earlier on Monday that SoftBank was in talks to inject an additional two billion U.S. dollars into WeWork.