The model of the American coworking giant, which has 547 offices worldwide, is being questioned.
Do not call it more WeWork, but The We Company. On Wednesday, January 9th, the US start-up specializing in the rental of shared offices officially announced the change in its name. Objective: to focus more on diversifying your business, while the economic model of your historical core business still raises questions. "The beginning of a new story" assures Adam Neumann, his co-founder and chief.
However, this "rebranding" is only partial: the company maintains its corporate name, WeWork Companies Inc. And its announcement coincides with the confirmation that the large investment negotiated for several months with the Japanese Softbank conglomerate will not take place. A big failure for WeWork, who hoped to get up to $ 16 billion (€ 13.9 billion) to finance its ambitious development strategy.
In the end, Softbank will invest "only" 2 billion dollars. This transaction has two phases: a traditional fund-raising of $ 1 billion, based on a valuation of $ 42 billion; and the repurchase of $ 1 billion of shares held by other investors and WeWork employees. This practice is unusual, but the group of Masayoshi Son had already used it at the end of 2017 to increase its stake in the capital of Uber.
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This brings Softbank's total investment to over $ 10 billion. However, Mr. Son will not become the majority shareholder in WeWork, as he initially hoped. According to the American press, the business man had to face two obstacles. First, the sharp decline in the shares of his company (-35% in the fourth quarter of 2018), which would have reduced its financial flexibility with its shareholders.
Then, the reluctance of its partners in the Vision Fund, an investment in vehicles of almost $ 100 billion, launched in May 2017. It had already participated in a previous WeWork fundraiser. And he had to bring most of the $ 16 billion promised to the company by Mr. Son. This time, the sovereign funds of Saudi Arabia and Abu Dhabi, the main contributors to the Vision fund, vetoed the fact that the agreement was too risky in times of uncertainty about global economic growth.