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the blinding rise of WeWork hampered

The model of the American coworking giant, which has 547 offices in the world, has been questioned.

From Jérôme Marin Published today at 11:14 am

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The entrance to a coworking room in WeWork, New York, January 8th. Brendan McDermid / REUTERS

Do not call it more WeWork, but The We Company. On Wednesday, January 9th, the American start-up, specialized in the rental of shared offices, officially announced the name change. Objective: to focus even more on the diversification of its activities, while the economic model of its core historical activity still raises questions. "The beginning of a new story" Adam Neumann, his co-founder and chief, assures.

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However, this "rebranding" is only partial: the company maintains its corporate name, WeWork Companies Inc. And the announcement coincides with the confirmation that the large investment that has been negotiated for several months with the Japanese Softbank conglomerate will not have place. A big fiasco for WeWork, which hoped to get $ 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 Masayoshi Son group had already used it at the end of 2017 to increase its stake in the capital of Uber.

The Silicon Valley codes

This brings Softbank's total investment to over $ 10 billion. However, Mr. Son does 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 its 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 that launched in May 2017. He had already participated in a previous WeWork fundraising. And he would bring a large part 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.

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