WeWork has agreed to be floated through a merger deal with BowX Acquisition in a deal that values office startup WeWork at nearly $9 billion, including debt.
But that represents a significant regression from its previous valuation of $47 billion in 2019 before its plan to list in the stock market failed due to investor concerns about its business model and the way its founder, Adam Neumann, is managed.
At the time, Goldman Sachs said the company could be worth as much as $65 billion, but fell to $8 billion after SoftBank was forced to withdraw a financing line from WeWork to save it from bankruptcy.
WeWork told potential investors that it lost about $3.2 billion last year trying to get listed in the stock market through a merger with a Special Purpose Acquisition Company (SPAC), in which SPAC-type companies are shell companies that use the proceeds of a public listing to purchase a private company.
WeWork was one of several notable companies taking this route to the stock market, and will raise about $1.3 billion in cash from its latest deal, including $800 million through private investments by Insight Partners, Fidelity Management and others.
Companies such as the Tesla rival Lucid Motors and the billionaire Richard Branson’s Virgin Galactic have opted for a stock market offering via SPAC over the traditional initial public offering.
Currently, Grab, known in South Asia for its ride-hailing and passenger services, is in talks to float in the US market through a major acquisition deal that could have a valuation of $40 billion. BowX Acquisition raised $420 million in its initial public offering last August.