WeWork gets $4.4B investment to expand co-working business
Japanese conglomerate SoftBank has invested $4.4 billion in WeWork, which offers co-working space in major cities around the world, according to The New York Times.
SoftBank made some of the capital outlay, its largest ever in the U.S., through its $93 billion Vision Fund. Approximately one-third will go toward WeWork's expansion in Asia, and the company's American operations will receive the rest, Recode reported.
This latest investment boosts WeWork's valuation to around $21 billion, making it third among privately held sharing economy startups to Airbnb and Uber.
WeWork is growing at lightening speed, and the investment community is banking on its success. Last month, the company raised $760 million in Series G funding, pushing its valuation from $16.9 billion to $20 billion. That's in addition to a handful of acquisitions in the last two years to improve its office design and build-out capabilities.
What makes co-working different from simply renting office space is that member individuals and companies are encouraged to work collaboratively, not shut themselves away in their own leased space. Research on co-working has found that people find their tasks more meaningful, feel they have more control over their job and consider themselves part of a community when working in a shared space instead of a conventional office.
WeWork is not the first company to capitalize on co-working, but it is the first to bring it to scale. That's a major driver in the recent investment. And despite its targeting startups and sole practitioners, corporate America has come calling in a big way due to WeWork's indie design and amenities. IBM, as the sole tenant, is moving 600 employees into a 70,000-square-foot, WeWork-managed building in New York City. Other companies that want the same WeWork experience have hired the firm to design, build out and manage their office spaces as well.
To make their construction operations more efficient, the company purchased project management app FieldLens in June. WeWork had previously purchased BIM specialist Case to aid in its building design effort, as well as Welkio, a digital sign-in system developed by Hathaway, a WeWork tenant.
WeWork has also adapted its co-working concept into a co-living business, WeLive. Earlier this month, the company announced it would build a 36-story, mixed-use tower in Seattle with 23 stories dedicated to co-living. This will be the third WeLive building to date. Its 384 furnished apartments, ranging from studios to four-bedroom units, can be rented on a daily, weekly, monthly or yearly basis.
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