SoftBank to Invest Approx. $3 Billion in US-based Office-sharing Startup

Company - Pavan Pandey - Feb 27,2017

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softbank to invest approx 3 billion in us based office sharing startup

SoftBank, after acquiring Fortress investment group for $3.3 billion, now has plans to invest another $3 billion in WeWork, a US-based startup.

SoftBank Group Corp, the third largest Japanese public company to make an investment in a U.S. based office-sharing startup WeWork.

According to a report by CNBC, The investment is expected to be of over $3 billion including $2 billion of primary investment and $1 billion as the secondary investment. SoftBank may also increase its secondary investment to nearly $2 billion. Resulting in a total investment of $4 billion.

SoftBank is not the only Asian firm investing in WeWork. Earlier Chinese equity giant Hony Capital, Legend Holdings Corp. and China Oceanwide Holding Ltd. invested around $700 million last year.

WeWork has also received around $1 billion from US based firms such as Goldman Sachs and Benchmark.

WeWork designs virtual and physical communities, shared workspaces and services for entrepreneurs, freelancers, startups and small businesses. It was started in 2010, with its headquartered in New York City. 

WeWork has about 250 employees, working in 19 United States locations and 11 countries including United Kingdom, South Korea, Australia, Hong Kong, Canada, China, France, Israel, Mexico and Netherlands. 

WeWork has about 30,000 members, which have privileges like social events, health insurance, internal social network, an annual summer retreat and workshops. WeWork has a total valuation of about $16 billion. 

With this massive investment, SoftBank has continued with its strategy of acquisitions and investments. Recently, SoftBank made an all-cash deal of $3.3 billion to acquire Fortress Investment Group, an asset management company. SoftBank also has a major stake in Sprint, a US based Telecom Company and China’s e-commerce giant Alibaba among other firms. SoftBank has also acquired Britain’s chip manufacturer ARM Holdings for $32 billion.

SoftBank has also promised a $50 billion investment that would lead to a creation of 50,000 new jobs in the United States. These moves might be disturbing for some of world’s economist as SoftBank is under a heavy debt.