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SoftBank to invest additional US$2b in WeWork: sources
[NEW YORK] SoftBank Group Corp will inject another US$2 billion in WeWork Cos Inc this year, bringing the Japanese conglomerate's total investment in the office space provider to more than US$10 billion, according to two people familiar with the matter.
The new investment will value WeWork at US$47 billion, one of the sources said. SoftBank will separately convert previously purchased warrants into equity at a valuation of US$20 billion, 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 US$10.4 billion and comes following declines in global stock markets which have hurt the value of technology shares.
With tech firms buffeted by fears of a slowdown in global growth and Sino-US trade friction, shares in one portfolio company, publicly listed chipmaker Nvdia Corp, have fallen 50 per cent from their October high.
The WeWork investment comes after SoftBank raised US$23.5 billion last month listing its domestic telco, SoftBank Corp, in Japan's biggest-ever IPO. Shares fell 15 per cent in the unit's trading debut last month, erasing US$9 billion in value and are currently trading 5 per cent 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 scepticism 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 US$1 billion from SoftBank in the form of a convertible note followed by US$3 billion in November in the form of equity warrants.
The Financial Times reported earlier on Monday that SoftBank was in talks to inject an additional US$2 billion into WeWork.