Hours before WeWork withdrew its initial public offering on Sept. 30, a Tokyo-listed competitor priced its own shares in a public offering that added more than $200 million to its coffers.
The timing was coincidental, says TKP founder and President Takateru Kawano. Nevertheless, it was as if investors were giving his office space company a stamp of approval while shunning its bigger and more famous peer. TKP’s new shares were priced 40% above their value at the end of last year. WeWork, meanwhile, took a $9.5 billion bailout from SoftBank Group that valued the company at less than a fifth of its former $47 billion price tag.
There was nothing coincidental about that difference in performance, however. While WeWork’s losses more than doubled to $1.3 billion for the third quarter, TKP has logged a net profit for nine of the 10 quarters since it went public in March 2017.
The rise of this WeWork rival in Asia is the latest sign that SoftBank’s “kingmaker” strategy — in which it uses its $100 billion Vision Fund to power the growth of selected startups and drive out competitors — is not working.
U.S. ride-hailing giant Uber Technologies, which received about $7.7 billion from SoftBank last year, continues to battle Lyft and its own lackluster stock price. Indian hotel startup Oyo has stumbled in Japan, where sources say it has missed ambitious expansion targets and faced labor disputes.
As for WeWork, its expected downsizing in the coming months could give TKP room to expand. “WeWork had been renting entire buildings [from owners] at very high prices,” Kawano said in a recent interview, pacing restlessly around the room. “It was hard to compete. Now we can build inventory properly.”