WeWork has secured an additional $3 billion

WeWork has secured an additional $3 billion of funding from SoftBank at a $42 billion valuation even as the flexible office provider’s losses ballooned to $2 billion on an annual basis. SoftBank will inject the funding next year in exchange for a warrant enabling it to buy new WeWork shares by the end of September 2019, at a price that will lift the group’s valuation from the $20 billion hit in its last equity funding round. The injection increases WeWork’s cash pile to $6.4 billion… The serviced office group is shaking up markets in large cities worldwide, leasing millions of square feet of space that is fitted out and rented to small businesses and departments of corporates on all-inclusive short-term deals. Under the new deal with WeWork, SoftBank will pay the serviced office provider $1.5 billion on January 15 next year and another $1.5 billion on April 15. The warrant will be converted into WeWork stock at an exercise price of at least $110 a share — valuing the company at $42 billion — on September 30 or before, according to triggers, including a sale. SoftBank’s latest commitment follows a $1 billion investment this year in the form of a convertible bond. Last year Soft-Bank and its Saudi-backed Vision Fund invested $4.4 billion in WeWork’s equity.

Judith Evans and Eric Platt