WeWork Could Go Broke If It Does Not Raise More Capital
[bctt tweet=”The We Company is seeking up to $4.5 billion in new capital, while its India franchise is looking for $200 million in funding after it failed to lock in a deal with a local lender for $100 million.” username=”allwork_space”]
This news follows the collapse of the We Company’s initial public offering and the resignation of co-founder Adam Neumann as CEO.
While whatever WeWork does in the U.S. does not have a direct impact on WeWork India, its tarnished reputation surely can’t be helping.
Jitu Virwani, the franchise’s largest shareholder and chairman of Embassy Group, said that the delayed IPO was clearly having an effect on their ability to raise money, despite being a franchise.
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“Yes, it [the We Company’s IPO failure] has been a bit of a challenge for us, we had a bit of a setback when we were looking to raise $100 million from ICICI [Indian lender],” said Virwani. “But we’ve decided to put our own money into the business [if required].”
In the meantime, WeWork is reportedly trying to raise new capital from its largest backer SoftBank and JPMorgan. The firm is trying to secure a $3 billion debt package from JPMorgan, but the bank is looking to see if SoftBank still has the confidence to invest into WeWork like it once did. If WeWork fails to raise more capital, it could be out of money by the end of June 2020.
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