Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

WeWork inks office space deal with SoftBank-backed Gympass: sources

Published 2020-01-26, 06:55 p/m
Updated 2020-01-26, 06:55 p/m
© Reuters. A sign is seen above the entrance to the WeWork corporate headquarters in Manhattan, New York

© Reuters. A sign is seen above the entrance to the WeWork corporate headquarters in Manhattan, New York

By Joshua Franklin

NEW YORK (Reuters) - WeWork has signed a deal to provide space to 250 employees of gym membership app company Gympass in New York, the latest example of the U.S. office-sharing start-up's majority owner, SoftBank Group Corp, using its connections to buoy its business, people familiar with the matter said on Sunday.

SoftBank is also a minority investor in Gympass. While it does not have absolute control over it, it encourages its portfolio companies to collaborate, one of the sources said.

Around 25,000 employees at SoftBank-backed companies, including U.S. ride-hailing start-up Uber Technologies, Brazilian online housing broker QuintoAndar, and online real estate marketplace Compass, are in WeWork offices.

SoftBank is hoping this network of portfolio companies will help its attempted turnaround of WeWork, which it rescued from bankruptcy last year by acquiring majority control. This followed a failed attempt by WeWork to launch an initial public offering in September, which left it starved for cash.

Last year, in the third quarter alone, WeWork parent The We Company saw its net losses more than double to $1.25 billion year-on-year.

WeWork has around 650,000 subscribers worldwide, and hopes to hit 1 million by early 2021, one of the sources said.

The company has agreed a three year-deal with Gympass, which was founded in Brazil but is now headquartered in New York, for office space in Manhattan's SoHo area, potentially tripling Gympass' presence in the city, according to the sources.

The sources did not disclose the value of the contract and requested anonymity because the agreement is private.

Gympass, which was not previously a WeWork client, is a marketplace for corporate clients to offer gym access to employees through a network of over 50,000 gyms and studios around the world.

It was last valued in 2019 at $1 billion in a $300 million fundraising led by SoftBank, according to data provider PitchBook.

After taking control of WeWork, SoftBank installed its chief operating officer Marcelo Claure as executive chairman. WeWork’s co-founder and ex-CEO Adam Neumann agreed to leave the company in October after securing an exit package from SoftBank worth up to $1.7 billion.

Neumann sought to branch out WeWork's concept to areas such as education and made a flurry of acquisitions, many of which the company is now looking to divest.

© Reuters. A sign is seen above the entrance to the WeWork corporate headquarters in Manhattan, New York

(Corrects name of Gympass in first paragraph.)

Latest comments

band aid
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.