SoftBank and Vision Fund Invest $4.4 Billion in WeWork

SoftBank’s founder, Masayoshi Son, has been able to raise tens of billions of dollars from the likes of Saudi Arabia and Apple for its Vision Fund.
Shizuo Kambayashi/Associated Press

As part of a multibillion-dollar investment spree over the past year, SoftBank of Japan has bet on companies as diverse as the graphics chip maker Nvidia, an artificial intelligence software maker and an indoor farming start-up.

Now, the Japanese conglomerate has chosen to bet $4.4 billion on WeWork, a fast-growing start-up that provides shared work spaces.

SoftBank and its $93 billion Vision Fund said on Thursday that they were investing in WeWork. Most of the investment, or $3 billion, will go to WeWork itself. The remaining $1.4 billion will go toward expanding the start-up’s operations in China, Japan, South Korea and Southeast Asia more broadly.

The investment values the seven-year-old WeWork at about $17 billion, excluding the new investment, according to people briefed on the deal, who were not authorized to speak publicly.

More than half of the $3 billion investment in WeWork will come from the Vision Fund, according to one of the people briefed on the deal. And slightly more than half of the investment will be used to buy shares from existing investors, while the remainder will go toward buying newly issued stock from the company.

The news reflects the enormous financial firepower that SoftBank has amassed over the past year — and proved willing to spend. Softbank’s founder, Masayoshi Son, has never been shy about his ambition to seize upon the future of technology through investments and acquisitions.

That is why he was willing to buy ARM Holdings, the British semiconductor designer whose chips underpin modern smartphones, for $32 billion last year. And why he has invested billions of dollars in ride-hailing companies around the world.

And it is why he has raised $93 billion so far for the Vision Fund, an investment behemoth whose backers include the kingdoms of Saudi Arabia and Abu Dhabi as well as Apple and Qualcomm. With those resources, Mr. Son is now able to deploy more money in one deal than most venture capital firms can dream of spending in years.

At first blush, WeWork’s connection to the future of technology appears more tenuous than, say, the British virtual reality start-up Improbable, which SoftBank poured $500 million into in May.

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SOURCE: NY Times, Michael J. de la Merced