WeWork Gets a Visit From Financial Reality
The SoftBank Vision Fund’s decision not to invest more in the office-space startup shows that it’s just a real-estate company. And a risky one at that.
There are plenty of alarm bells ringing around WeWork.
Photographer: Caitlin Ochs/BloombergThe tech bubble’s financial backer of last resort, the $100 billion SoftBank Vision Fund, seems to be having second thoughts about its role as booster-in-chief of very expensive and very unprofitable startups. That’s healthy for the fund. But it must be troubling for the various companies and industries that were relying on its largess — not least the real-estate sector.
The bridge too far appears to be WeWork Cos. Inc., the fast-growing $20 billion shared-office-space provider that masquerades as a “physical social network.” While SoftBank Group Corp.’s founder Masayoshi Son and his backers in the Gulf region had been expected to splurge $15 billion to $20 billion on a majority stake in WeWork, the Financial Times has reported that the plan is now for a more miserly $2 billion. The Vision Fund, a kind of gargantuan private equity shop run by Son and SoftBank, is no longer expected to take part.