WASHINGTON: Japan’s SoftBank Group Corp (9984.T) is close to making an investment in U.S. office-sharing startup WeWork expected to be worth over $3 billion, CNBC reported on Monday, as it expands its reach beyond tech and telecoms. Led by founder Masayashi Son, SoftBank has made a string of surprising acquisitions and investments over the past months, most recently an all-cash deal to buy asset manager Fortress Investment Group (FIG.N). The deals come as SoftBank moves towards cutting-edge tech investments as telecoms services markets mature, announcing last year the creation of a tech investment fund with Saudi Arabia that could grow to $100 billion and make the group one of the world’s largest private equity investors. SoftBank is looking at a $2 billion primary tranche of funding in New York-based WeWork, followed by a secondary round worth more than $1 billion, CNBC reported, citing an anonymous source. The company could increase the size of the secondary investment to nearly $2 billion for a total investment of almost $4 billion, CNBC added. If the deal closed, WeWork would be valued at more than $20 billion.
SoftBank had been in discussions for some time regarding an investment, two people at one of WeWork’s investors said, without elaborating. WeWork, which provides shared workspaces to start-ups in the Americas, Europe, Hong Kong and Shanghai, plans to expand to Beijing in May, co-founder Miguel McKelvey told reporters in Hong Kong last week. It will continue to raise capital for expansion ahead of an expected public listing, McKelvey said, without indicating a time frame. Chinese private equity giant Hony Capital, its backer Legend Holdings Corp (3396.HK) and property developer China Oceanwide Holdings Ltd (0715.HK), among others, last year ploughed $700 million into WeWork. The deal valued WeWork at $16.7 billion, Hony said – less than that reported by CNBC but still making it among the world’s most valuable startups. SoftBank shares fell as much as 2.3 percent in morning trade, compared with a 1.4 fall for the benchmark Nikkei average .N225.
