SoftBank Group Corp. has ponied up $1B in additional investment for co-working giant WeWork Co. According to WeWork, the investment is in the form of convertible notes, which is a type of short-term loan that will eventually become equity in conjunction with a future round of financing.
For the Japanese investor SoftBank, there are two possible outcomes for its short-term debt funding to WeWork: if SoftBank leads a further equity round of at least $1B, the notes will convert into preferred shares at a valuation that the investor sets, the Wall Street Journal reports.
The other possibility is if another investor leads a funding round of $1B or more, SoftBank will get shares at a minimum price of $110/share, which would value the company at $42B, or twice the most recent valuation.
Thus far, Softbank has invested about $4.4B in equity funding into WeWork. The additional funds will allow WeWork to acquire new properties, as well as update its existing offices.
The company has also been aggressively expanding its business to include a multitude of services for all manner of office users, not just WeWork clients.