WeWork raises another $1 billion from SoftBank

Tinuku - WeWork gets another US$1 billion from SoftBank, this time in the form of convertible notes. As WeWork Co.’s co-working business grows, so have its expenses, which means it continues to need cash. Luckily, the start-up has a willing partner SoftBank Group Corp.

The Japanese conglomerate will invest another US$1 billion in WeWork in the form of a convertible note, WeWork said Thursday in a discussion of its first-half performance. The New York-based co-working company had US$1.9 billion in cash on hand as of June 30 and already raised about US$5 billion from SoftBank last summer and earlier this year for its China-focused subsidiary.

Tinuku WeWork raises another $1 billion from SoftBank

This year, WeWork has started informally discussing some of its financial information, including numbers for last year and the first quarter of this year. Other financial information also became public this year when it sold US$702 million in bonds rated as junk by credit agencies.

“WeWork’s sales are rising and its construction costs per desk are dropping. All of those together basically give you the confidence to want to go faster. There’s significant interest in WeWork equity from large institutions.” said Artie Minson, WeWork’s president and CFO.

If that investor interest leads to another funding round of at least US$1 billion, or if the company goes public, SoftBank’s loan to WeWork will convert to equity. The price per share will depend on whether SoftBank or another investor leads the round, the company said. If another firm is the majority investor, SoftBank will get a guaranteed minimum price per share of US$110, which would value the company at $42 billion.

WeWork’s most recent fundraising round valued the company at US$20 billion, though a SoftBank executive said that the company was seeking to raise more at a US$35 billion valuation. The startup 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.

In documents related to its bond offering, the company said it lost US$933 million on US$886 million in sales last year. In the first half of this year it lost US$723 million on US$764 million in sales. The company expects at least US$1.8 billion in sales over the next 12 months.