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WeWork is getting $3 billion more from Softbank

WeWork, the New York-based coworking giant, is getting another major investment from Japanese conglomerate S...

Posted: Nov 13, 2018 9:43 PM
Updated: Nov 13, 2018 9:43 PM

WeWork, the New York-based coworking giant, is getting another major investment from Japanese conglomerate SoftBank.

WeWork announced Tuesday it has signed a $3 billion warrant with SoftBank. The agreement gives SoftBank the ability to buy WeWork shares for $110 a piece before September 2019 -- whether it goes public, raises another $1 billion in funding, or gets acquired.

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WeWork is now valued at $42 billion following the investment, according to a spokesperson for the company. It was valued at $20 billion when SoftBank invested $4.4 billion last year.

The warrant is with SoftBank -- not the SoftBank Vision Fund, which is bankrolled in part by the Saudi government, a controversial subject in Silicon Valley since the death of journalist Jamal Khashoggi.

Founded in 2010, WeWork has raised $10.6 billion to date, $8.65 billion of which comes directly from SoftBank, the company spokesperson said.

The news of the deal, which WeWork announced as part of its third quarter financial update to investors, was first reported by Bloomberg on Tuesday.

WeWork has been giving select financial metric updates since last quarter after raising more than $700 million in a bond offering.

WeWork operates in 24 countries across 83 cities. It reported to investors Tuesday that 50% of its desks are now outside of the US and that its occupancy is at 84%.

The company said that enterprise companies such as Microsoft and and Bank of America make up a growing portion of its memberships, 29%, up from 25% last quarter.

WeWork's selling point is "community" — the company prides itself on helping set the culture for the entrepreneurs and businesses that use its facilities.

The ways in which it tries to foster "community" go beyond working, too: WeWork opened a gym, is trying to make co-living a thing, turned a Wall Street mailroom into a public speakeasy bar, and recently opened a school inside its New York City headquarters.

But the company is still figuring out what makes the best office environment for members. Last month, WeWork began curbing members' beer consumption at New York City WeWork locations. The company is known for having unlimited free beer on tap.

The decision to test out a quota of four beers per day per member in New York City comes at a time when inappropriate office behavior, often fueled by drinking, is under the spotlight at tech companies.

It also came after a lawsuit from a former employee challenged WeWork's corporate culture and shed light on its alcohol consumption, noting its "free beer on tap all day in all offices policy." Notably, the new quota that the company is testing out doesn't apply to its own workers. WeWork declined to comment on its internal policies for workplace drinking.

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