New York based Co-working giant, WeWork to raise up to $4 Bn in debt ahead of issuing IPO

Co-working giant WeWork is looking ahead to raise $3 Bn to $4 Bn in debt ahead of issuing IPO.

Valued at $47Bn in a recent private fundraising round, the co-working/shared space pioneer has raised $8.4 Bn since its inception in 2010. They have expanded to over 500 office locations across 100 cities globally.

The company is looking to boost investor confidence by raising debt. If the debt funding goes through, it will give the company sufficient backing to carry itself to profitability along with some time to build a sustainable future ready business model. The funding to be received through the debt offering, over and above the IPO issue, has the potential to grow to $10 Bn in the coming years. So far, WeWork has discussed the debt offering with executives at Goldman Sachs and JPMorgan Chase.

Rebranded as We Company, the company hit a roadblock in Jan 2019 when they couldn’t boost the stake of Japan based SoftBank enough. While it grew by $2 Bn, it still wasn’t enough to grow and buy out existing shareholders.

Yet to achieve profitability, WeWork doubled its revenue to $1.82 Bn last year, and at the same time incurred double the loss, amounting to $1.92 Bn.

WeWork is attempting to facilitate a $2.75 Bn credit line in the months ahead of a planned IPO which was confidentially filed with the U.S. Securities and Exchange Commission in April 2019.

Redesigning how shared working spaces work, WeWork for sure has raised the bar for the co-working industry. But will chirpy hangout areas with beer on tap, trendy work spaces,  and pet-friendly policies apart from the rising Gen Z mind-set shift to Gig economy be sufficient to keep the company going and growing? We will find out in time.