WeWork gets another $1bn from Japan’s SoftBank

By James Buckley - Friday, August 10, 2018 12:31

Main news image
Japanese banking giant SoftBank has invested another $1bn in WeWork in the form of a convertible note, as the US co-working firm reported surging revenue but also mounting losses.

Japanese banking giant SoftBank has invested another $1bn in WeWork in the form of a convertible note, as the US co-working firm reported surging revenues but also mounting losses.

WeWork said yesterday it had $1.9bn in cash as of June 30 and the latest equity injection is on top of the $5bn raised last year from SoftBank and earlier this year for its China-focused subsidiary. 

WeWork said on Thursday its second-quarter sales more than doubled from a year earlier as it added new members at a faster pace. The group reported a revenue rise to $421.6m from $198.3m for the same period last year as memberships reached 268,000 at the end of June from 128,000 a year earlier.

However, net losses jumped to $723m over the second half of 2018 from $154m a year earlier.

If investor interest leads to another funding round of at least $1 billion, or if the company goes public, SoftBank’s loan to WeWork will convert to equity. WeWork's most recent fundraising round valued the company at $20bn  but the company is seeking to raise more at a $35bn valuation.

WeWork also said it acquired two small general contracting firms, one in New York and another in London, as part of its effort to bring more parts of the design and construction process in-house.

CoStar News revealed last week that WeWork’s total lease commitments in the UK had topped £3bn across more than 3m sq ft of office space, as the US co-working giant’s equity raise for its global property investment fund hit $850m.

According to leasing information pieced together from CoStar data and a third-party source which did not want to be named, WeWork’s rental commitments in the UK - predominantly in London - now stand at £3.02bn over the next 24 years, £1bn more than in October 2017 when the company's UK accounts were last published.

The data shows that WeWork is now signed up to 41 leases in the UK, totalling 3.06m sq ft of office space. The total rent amounts to around £164m per year with an average lease length of circa 18.5 years.

However, the data does not take into account any rent-free periods, for which a complete picture of verified data is opaque at best. A source said that WeWork’s actual rental commitments reflect a nominal part of the company’s overall rental obligations over the next 20 years plus. No more than 7% of its rental commitments are due in any given year, representing a manageable outlay for the company.

jbuckley@costar.co.uk

Get in Touch
+44 203 205 4600