WeWork may seek IPO valuation of between US$15 billion and US$18 billion

Office sharing firm WeWork may be seeking a valuation as low as between US$15 billion and US$18 billion in its public listing, which will be almost one-third of the US$47 billion valuation in its last private fundraising round in January.

Sources told Bloomberg that SoftBank is pressing for WeWork to postpone its stock offering but the decision would lie with co-founder and chief executive officer Adam Neumann, who maintains voting control through a three-class share structure.

SoftBank is WeWork’s largest investor, as it holds a 29% stake of the firm’s stock. A low valuation would not only impact the co-working space that is regarded as one of America’s most valuable unicorn startup but also impact SoftBank’s fundraising schemes.

According to the sources, SoftBank, is pressing for the co-working spaces firm to postpone its debut into the public market.

The weak listings from founder Masayoshi Son’s SoftBank supported tech firms – Uber and Slack – have already impacted the returns for the investor’s first Vision Fund.

SoftBank is currently seeking funds from investors for a second Vision Fund, and currently around US$108 billion in pledges have been secured.

WeWork is currently seeking for fresh funds and are looking to raise between US$3 billion and US$4 billion in the initial public offering (IPO), after burning through US$2.36 billion in cash in the first half of the year, according to Reuters.

SoftBank is reluctant to pump in fresh funds for the real estate company, having splashed US$10.65 billion in total on it so far. The most recent injection was made in a funding round in January which gave the firm a US$47 billion valuation.

WeWork is founded in 2010 and is headquartered in New York. It generates income by renting office space. For the six months ended June 30, 2019, the company reported a revenue of US$1.54 billion with a net income loss of more than US$900 million.