Office-sharing startup WeWork takes SPAC route to go public in $9b deal

FILE PHOTO: A WeWork logo is pictured in the Manhattan borough of New York City, New York, U.S., October 4, 2019. REUTERS/Carlo Allegri

WeWork has agreed to go public through a merger with blank-check firm BowX Acquisition Corp, in a deal that values it at $9 billion, the office-sharing startup said on Friday.

It marks a steep drop from the $47 billion that WeWork was valued for a listing in 2019, ahead of a botched listing plan that imploded due to investor concerns over its business model and its founder Adam Neumann’s management style.

Back then Goldman Sachs bankers had said the valuation could hit as much as $65 billion, but instead it plummeted to roughly $8 billion after SoftBank Group Corp was forced to extend a life-saving financing lifeline to WeWork.

The startup told prospective investors it lost about $3.2 billion last year as part of a pitch for a stock market listing by merging with a special purpose acquisition company (SPAC), sources told Reuters earlier this week.

WeWork will fetch $1.3 billion in cash from the latest deal, including $800 million in private investment from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others, the Journal reported.

A SPAC is a shell firm that uses proceeds from a public listing to buy a private firm and WeWork is the latest in a slew of high-profile companies that have taken this route to the markets.

Tesla Inc’s rival Lucid Motors and Richard Branson-led Virgin Galactic Holdings Inc too have chosen SPAC mergers over traditional IPOs.

Southeast Asia’s ride-hailing and food delivery giant Grab Holdings is in talks to go public in the United States through a mega-merger that would value it at $40 billion, Reuters reported earlier this month.

BowX Acquisition raised $420 million in its IPO in August last year.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.