On Monday, Softbank was reported to have closed a deal to invest in startup company WeWork around $3 billion. According to reports, the initial $2 billion of investment will be allocated for WeWork’s initial tranche of funding, which will then be followed by a second round of funding of $1 billion, but may increase up to $2 billion.
Should Softbank increase the secondary round of funding, WeWork will be expecting to receive around $4 billion of investment from the Japanese tech company, which could then value WeWork at around $20 billion.
The investment from Softbank comes as the telecommunications company strives to expand its reach and market presence in tech and telecoms industry. Softbank seeks to increase its tech investment as the industry continues to grow.
WeWork is a company known in providing shared workspace, community and services to entrepreneurs, small businesses, freelancers and more. The company provides workspaces for other startup companies in Europe, America, Hong Kong, and Shanghai. In recent interviews, WeWork’s founder Miguel McKelvey announced their plan to further expand the company’s reach in Beijing by May this year.
With Softbank’s latest investment in the startup company, an estimated 3,000 new jobs are expected to be created in the US area in the next four years
Softbank investment in WeWork is focused on providing affordable, high-speed internet to rural areas in America and other emerging markets with the use of technology called Progressive Pitch.
Over the course of a few months, Softbank has already closed investments deals with other companies with its goal for expanding in the telecoms industry led by founder Masayashi Son. Softbank seeks to further expand its tech investment fund with Saudi Arabia that could potentially grow to $100 billion. The company’s most recent acquisition was in purchasing asset manager Fortress Investment Group for $3.3 billion.
Recent reports also mentioned Softbank’s plans to merge its subsidiary Sprint with T-Mobile US, but was eventually turned down by the US-company, and with oppositions made clear by telecom regulators indicating their persistence to block any acquisition of the fourth-largest US carrier.
During the first half of 2016, Softbank completed an acquisition transaction in buying British semiconductor and software company ARM holdings, valuing the company at $32 billion.
Meanwhile in previous reports, Apple also confirmed its plans in investing in Softbank’s tech fund with around $1 billion.
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