Softbank Group has asked WeWork to suspend its listing plan because of the lack of interest of investment institutions in buying new shares in the company.
Editor’s note: This article is from “Tencent Technology”, review: Hey.
WeWork, the second-home company in the United States, is currently preparing for the listing process. The sharp decline in the valuation of the company has caused public concern. According to the latest news from foreign media, sources said that WeWork’s valuation has fallen to 15 billion US dollars to 18 billion US dollars, which is only one-third of the past investment valuation of Softbank Group.
According to foreign media reports, WeWork’s largest shareholder is Softbank Group and its vision fund, with a total investment of 10 billion US dollars. In the last investment transaction of Softbank Group, WeWork was valued at 47 billion US dollars.
A source familiar with the situation said that the loss of the US office-sharing startup may be as low as $15-18 billion.
But another source said that the company’s valuation is unlikely to be so low.
According to several media reports, the WeWork listing process entered the roadshow stage this week. In addition, underwriters and WeWork are also discussing reducing valuations and attracting interest from investment institutions. The previous news only said that valuations may fall below 200. One hundred million U.S. dollars.
According to a British media report, Softbank Group has asked WeWork to suspend its listing plan because of the lack of interest of investment institutions in buying new shares of the company.
It is widely believed that the $100 billion vision fund managed by the Softbank Group of Japan has fueled the bubble of valuation of technology companies. Softbank Group declined to comment on the sharp decline in WeWork’s valuation.
It is reported that on May, WeWork had negotiated with Softbank Group, hoping to refinance and suspend the listing plan, but sources said that Softbank Group is not willing to inject more funds into WeWork, which means that this startup may There is no choice but to go public with a valuation that is much lower than expected.
Before WeWork planned to go public, other startups including Uber, Lyft and corporate chat service provider Slack also had weak initial deals, with both Uber and Slack being supported by Softbank.
Although Softbank and its Vision Fund emphasize its long-term investment strategy, its founder and CEO, Sun Zhengyi, has developed an ambitious IPO program for investment companies in the technology sector, involving taxi software, financial technology and Healthy start-ups.
Suspending the listing of WeWork will disrupt the plan. Currently, Softbank is working for a total of 1The $100 billion Vision Fund 2 seeks funding from investors.
One source said that although Sun Zheng’s longtime deputy and vice chairman of Softbank Group Ron Fisher are pushing for IPOs, others in the Softbank Group are pushing to delay the WeWork IPO.
Chris Lane, an analyst at Bear Stearns Research Inc., said that if WeWork suspends its IPO, Softbank may offer another financing plan for the startup, which he estimates will cost $9 billion to cash. Positive value.
The above analyst Ryan said that Softbank has an important voice, but more importantly, Softbank has funds. Currently, Ryan’s valuation of the office space sharing company is $23 billion.
Softbank’s technology investment group raised $100 billion in funds for the first time in just two years. Most of the funds have been burned cleanly, and the internal valuation of its technology investment has also recorded huge gains.
Softbank defended its valuation model, which takes into account cash flow analysis, recent transactions, and comparisons with peers.
As of the end of June, the Vision Fund’s investment value for 83 start-ups reached $71 billion, an increase of $20 billion. Since then, the shares of both Uber and Slack have fallen by about a third.
The Softbank Group said that among some of the technology companies invested by the company, other companies are participating in the investment at the same time, or continue to invest at the same or higher valuations. This is actually a vote of confidence in Softbank investment transactions.
In the global venture capital industry, Sun Zheng’s Softbank Group has brought a huge impact. Softbank often looks for leading technology companies in the industry, investing hundreds of millions of dollars or even billions of dollars at a time, getting 10% or 20%. The large stakes, while getting board seats, affect the decision-making of technology companies.
Under the influence of Softbank Group, the global venture capital industry has also begun to expand the size of the fund, and the amount of single investment has also begun to be in the “100 million US dollars”. The size of a single round of financing for some popular mobile Internet companies is more than a billion dollars. (Tencent Technology Review / Cheng Hao)