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WeWork, the office company that works in the same sector, has grown rapidly over its eight years of life, thanks in part to the huge investments of Japan's SoftBank. On Tuesday, he got another big cash injection from his main investor.
WeWork announced that SoftBank has committed an additional $ 3 billion worth at least $ 42 billion. This is more than double the $ 20 billion WeWork achieved last fundraising more than a year ago and makes WeWork one of the most valuable privately funded companies to date. venture capital in America.
SoftBank injects the new money in exchange for an additional share purchase mandate in WeWork.
The agreement highlights the costs of the ambitious construction of the empire by WeWork. Not only is the company expanding rapidly around the world, but it is not limited to its core business of renting and reselling office space in education, apartments, etc.
The company said Tuesday that it had 297,000 offices available in 24 countries and planned to open more than 100,000 new offices for rent this quarter, the same amount as last year. WeWork said it generated a $ 1.25 billion business figure for the first nine months of 2018 and achieved a sales pace of more than $ 2 billion at the end of the year.
Nevertheless, to finance its expansion, WeWork needs money. The company also announced Tuesday it had lost $ 1.22 billion in the first nine months of this year after losing $ 933 million in 2017. And earlier this year, it had issued $ 700 million of bonds.
One question is whether such losses will affect investor appetite for WeWork's initial public offering. WeWork President Arthur Minson declined to comment on the possible timetable for an initial offer, but said the company could start making money if it stopped its staggering expansion. For the moment, this is not in the study.
"We will continue to focus on future opportunities," he said in an interview.
We help subsidize WeWork's ambitions with SoftBank's money, which already held a 20% stake in WeWork.
Tuesday's commitment does not make it possible to determine the current state of WeWork's discussions in order to sell more to SoftBank. Last month, the two companies discussed the acquisition of a majority stake in SoftWank in WeWork. Mr. Minson declined to comment on the case.
SoftBank has become one of the most prolific technology investors after lifting its Vision Fund by nearly $ 100 billion last year to take equity positions in transformation technology companies. The agreement made on Tuesday with WeWork makes the joint venture one of its biggest bets so far.
The operation came from SoftBank itself, in contrast to last year's investment, which came from the Vision Fund. Nearly half of the huge war chest of this fund comes from Saudi Arabia. sparked a debate within Silicon Valley on whether start-ups should accept their money following the murder of Saudi journalist Jamal Khashoggi.
Mr. Minson declined to comment on the fact that WeWork had taken money from the Saudi government through the Vision Fund.
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