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SoftBank – WeWork deal in doubt?

Saudis and Emirates force Masa’s hand

SoftBank’s Masayoshi Son (Credit: Bloomberg)

Key investors in SoftBank’s $100 billion Vision Fund are pushing back against a proposed $16 billion investment in WeWork. After already investing $11.4 billion in the co-working startup, Saudi Arabia’s PIF and Abu Dhabi’s Mubadala have cast doubt on the viability of WeWork, the WSJ reported. They have expressed concerns over the company’s expected $2 billion loss this year, and that WeWork’s business model would be exposed in a downturn.

The Kicker: The two government-backed funds are heavily invested in real estate, and want Masa’s Vision Fund to stick technology bets. Happy they realized this after investing $11.4 billion.

Worth Noting: The deal isn’t dead, but Adam Neumann’s job just got harder. SoftBank is considering using its own cash, raising debt, or bringing in outside investors to fund the $16 billion investment. It may even use the proceeds from the IPO of its Japanese telecom business.

SoftBank’s Masa found kindred spirits in Neumann… He summed up his investment philosophy by saying, “Feeling is more important than just looking at the numbers. You have to feel the force, like Star Wars.” Neumann said earlier this year, “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”

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