TOKYO – Japanese consortium SoftBank is considering the possibility of injecting an additional $5 billion into shared workspace firm WeWork, Japanese financial daily Nikkei reported Friday, citing sources from the technology group.
This is SoftBank’s second major investment in the New York-based firm, whose parent company is We Co and which had earlier received $10 billion in funding from venture capital Vision Fund.
“The financial support is not a rescue,” an unidentified SoftBank executive reportedly told Nikkei. “It is purely because we determined that We will once again return to the pathway to growth.”
SoftBank and Saudi Arabia’s sovereign wealth funds are among Vision Fund’s main financiers.
The news comes two weeks after WeWork withdrew its initial public offering filing, amid reports that the company’s worth could be reduced by more than half due to the current crisis afflicting it.
According to WeWork’s document, the firm posted a 2017 net loss of $1.9 billion and a $900 million net loss in the first half of this year.
With this new investment, SoftBank would have invested – directly or indirectly (through Vision Fund) – about $13.8 billion in WeWork.
WeWork’s worth – which once reached $47 billion – fell below $20 billion before the postponement of its stock market debut was confirmed in September.
WeWork founder Adam Neumann was forced to resign as the chief executive officer due to this crisis.