WeWork, the office-space provider, has raised an additional $1 billion in debt from Japan’s SoftBank, the Financial Times reported.
The fundraising, which makes WeWork’s future even more closely tied to its major backer SoftBank, comes as the startup accelerates its global expansion. The company’s revenue is growing fast, but so are its losses. WeWork last year raised $4.4 billion from SoftBank and its Vision Fund in an equity investment round.
This time, SoftBank’s investment is in the form of a convertible note that lets the Japanese investor convert the bond to WeWork shares in the next equity fundraising round. If SoftBank leads the next round, it gets to decide WeWork’s valuation. If another investor leads the round, SoftBank’s loan will convert to shares at a guaranteed minimum price that values WeWork at $42 billion, more than double its $20 billion price tag in last year’s equity funding round.