NEW YORK (AFP) – Japanese technology giant SoftBank has invested USD2 billion in shared-office provider WeWork, considerably less than the United States (US) start-up was hoping for to fund its expansion.
WeWork boss Adam Neumann had earlier spoken of some USD20 billion in investment but SoftBank tycoon Masayoshi Son appeared to scale back his ambition following a difficult few weeks for the Japanese firm, including a disappointing IPO for its mobile wing.
The USD2 billion cash injection brings to a total of USD6 billion the amount ploughed in by the Japanese firm and values WeWork at USD47 billion, almost as much as General Motors and more than Ford.
In a statement, WeWork also announced a rebranding exercise, re-naming itself “The We Company”.
Son said WeWork had “already experienced unparalleled growth” and that this cash boost would allow the firm to “aggressively pursue the enormous market opportunity ahead of them”.
The scaling-back in investment underscores dampening enthusiasm for technology shares, which have been hit during a recent decline in global equity markets.
It also comes after SoftBank’s mobile unit suffered a bruising debut on the Tokyo stock market following the world’s second-biggest IPO.