The rental based startup has almost engraved their name in the business column this year. WeWork, the SoftBank backed startup has been in the news for the infamous CEO and botched IPO. Last year, the nine years old lost $1.6 Billion on the revenue of $1.8 Billion.
According to a prospectus released, the New York-based company had only $2.5 Billion in cash as of June 30. Nevertheless, if the company continues to burn the cash at the current rate, it will be left empty-handed by next quarter. But the company doesn’t want to slow down its cascading growth.
On June 30, We Work’s website said that it had 528 location sites in 111 websites while presently the website shows 622 location sites in 123 cities. Altogether, it also says that the company will have 845 locations in 125 cities. The average design and construction of the site moderately cost $2.36 Million, as analyzed by Reuters. Now, it says that it added 94 new locations which will burn hundreds of millions of dollars.
In the year to June, it recorded $2.9 Billion in expenses while revenue was just $1.54 Billion. Recently, SoftBank has reportedly decided to take upon the company by fueling in billions of dollars in the company. The Japanese conglomerate already owns one-third of the company.
Restructuring the company
SoftBank has tapped on JP Morgan Chase Co. to seek $1.75 Billion in debt and also seeking $3.25 Billion in bank loans. It’s also in talks with major investment firms to juice in billions of dollars in the company.