One of WeWork buildings located in Gangnam Gu, South Korea. (Unsplash/CJ Dyrit)

WeWork Looks for Up to US$4 Billion in Debt Before Receiving in IPO

Kinanty Nadia Putri
Business & Industry
Start Up
Jul 08, 2019
2543
The global pioneer of co-working spaces company WeWork announced on Sunday (7/7) that it is looking to raise up to US$4 billion in debt in the next few months before receiving funding from potential public investors.

The move is aimed to boost investors’ confidence in a planned initial public offering (IPO) to perceive it as a profitable company, as WeWork was facing questions about the sustainability of its business which has been losing money more than US$1.93 billion—losses which doubling last year. While the revenue also more than doubled to US$1.82 billion. This made WeWork has yet to prove it can make money.

In addition, raising the debt funding is also intended to avoid the same disappointment given by Uber Technologies and Lyft to the public markets because of their lack of a timetable to reach probability that caused in steep losses, despite the high expectations. The event has prompted another loss-making start-up companies to reassess their plans before going public.

According to the Wall Street Journal, the debt offering will help WeWork to grow their funding as big as US$10 billion in the next few years, in which the money from the debt offering will be separate from funds the company would receive in IPO.

To reach the goals, the WeWork chief executive Adam Neumann has met with some representatives from banks such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. to work on the deal.

WeWork was founded in New York in 2010 by Adam Neumann and Miguel McKelvey. It has reshaped office practice around the world by offering a concept of co-working spaces filled with trendy work areas and lively communities. The company has expanded to 100 cities with 500 office locations.

Source: https://www.channelnewsasia.com/news/business/wework-looking-to-raise-up-to-us-4-billion-in-debt-ahead-of-ipo-11699836

WeWork , Business , Start-up , Debt , IPO , Investment , Co-workingSpaces , AdamNeumann , MiguelMcKelvey , NYC