WeWork inks office space deal with SoftBank-backed Gympass: sources
NEW YORK (Reuters) – WeWork has signed a deal to offer space to 250 staff of health club membership app firm Gympass in New York, the most recent instance of the U.S. office-sharing start-up’s majority proprietor, SoftBank Group Corp, utilizing its connections to buoy its enterprise, individuals acquainted with the matter mentioned on Sunday.
An indication is seen above the doorway to the WeWork company headquarters in Manhattan, New York, U.S., November 21, 2019. REUTERS/Mike Segar
SoftBank can be a minority investor in Gympass. While it doesn’t have absolute management over it, it encourages its portfolio corporations to collaborate, one of many sources mentioned.
Around 25,000 staff at SoftBank-backed corporations, together with U.S. ride-hailing start-up Uber Technologies, Brazilian on-line housing dealer QuintoAndar, and on-line actual property market Compass, are in WeWork workplaces.
SoftBank is hoping this community of portfolio corporations will assist its tried turnaround of WeWork, which it rescued from chapter final yr by buying majority management. This adopted a failed try by WeWork to launch an preliminary public providing in September, which left it starved for money.
Last yr, within the third quarter alone, WeWork mother or father The We Company noticed its internet losses greater than double to $1.25 billion year-on-year.
WeWork has round 650,000 subscribers worldwide, and hopes to hit 1 million by early 2021, one of many sources mentioned.
The firm has agreed a 3 year-deal with Gympass, which was based in Brazil however is now headquartered in New York, for office space in Manhattan’s SoHo space, probably tripling Gympass’ presence within the metropolis, in accordance with the sources.
The sources didn’t disclose the worth of the contract and requested anonymity as a result of the settlement is personal.
Gympass, which was not beforehand a WeWork shopper, is a market for company shoppers to supply health club entry to staff via a community of over 50,000 gyms and studios world wide.
It was final valued in 2019 at $1 billion in a $300 million fundraising led by SoftBank, in accordance with knowledge supplier PitchBook.
After taking management of WeWork, SoftBank put in its chief working officer Marcelo Claure as govt chairman. WeWork’s co-founder and ex-CEO Adam Neumann agreed to go away the corporate in October after securing an exit bundle from SoftBank value as much as $1.7 billion.
Neumann sought to department out WeWork’s idea to areas akin to training and made a flurry of acquisitions, lots of which the corporate is now seeking to divest.
(Corrects title of Gympass in first paragraph.)
Reporting by Joshua Franklin in New York; Editing by Bernadette Baum