CNBC reported that the Japanese telco giant is gearing up to make an initial investment of $2 billion into WeWork, with a view to putting nearly $1 billion more into the firm. The publication said the secondary investment could reach $2 billion, which would put SoftBank’s total input at $4 billion overall.
WeWork declined to comment on the report.
So far, the seven-year-old company has raised $1.4 billion from investors.
A source familiar with the situation confirmed that WeWork is in talks with SoftBank over an investment per the report. However, the person added that the Japanese had also held discussions with a view to participating in its $150 million Series C (2013) and $355 million Series D (2014) rounds, deals that SoftBank ultimately did not join.
One gating factor this time around centers on SoftBank’s Vision fund, which is still seeking commitments from investors, and in particular prospective LPs in the Middle East, our source added.
A $20 billion valuation would represent a slight jump on the $17 billion valuation that WeWork earned when it raised its $430 million Series F round last March. Last year’s capital raise was led by two prominent VC firms in China — Hony Capital and Legend Holdings — and marked WeWork’s first push into China, and Asia. Later that month, the firm announced plans for its first co-working spaces in Shanghai and Hong Kong. WeWork has broadly said it intends to be present in major cities across Asia but it declined to give more specific expectations. Bagging this mega round from SoftBank could be the catalyst it needs to make good on those regional ambitions and extend its strong presence in the West to the East.