NEW YORK (Reuters) – WeWork signed an agreement to provide space for 250 employees of the app company for Compass gyms in New York, the latest example of the majority owner of the US office-sharing start-up, SoftBank Group Corp , using their connections to, people familiar with the matter said on Sunday.
A sign is seen above the entrance to WeWork's corporate headquarters in Manhattan, New York, USA, November 21, 2019. REUTERS / Mike Segar
SoftBank is also a minority investor in Gympass. Although it does not have absolute control, it encourages companies in its portfolio to collaborate, said one of the sources.
About 25,000 employees of companies supported by SoftBank, including Uber Technologies, a startup in the United States, Brazilian online housing broker QuintoAndar and the online real estate market Compass, are in WeWork offices.
SoftBank hopes that this network of portfolio companies will help its attempt to recover WeWork, which it rescued from bankruptcy last year by acquiring majority control. This followed WeWork's failed attempt to launch an initial public offering in September, which left him hungry for money.
Last year, just in the third quarter, WeWork's parent company, The We Company, saw its net losses more than double, to $ 1.25 billion year on year.
WeWork has about 650,000 subscribers worldwide and expects to reach 1 million in early 2021, said one of the sources.
The company signed a three-year contract with Gympass, which was founded in Brazil, but is now based in New York, for offices in the SoHo area of Manhattan, potentially tripling Gympass' presence in the city, according to sources.
The sources did not disclose the value of the contract and requested anonymity because the contract is private.
Gympass, which previously was not a WeWork customer, is a market for corporate customers to offer employees access to gyms through a network of more than 50,000 gyms and studios worldwide.
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 president. WeWork co-founder and former CEO Adam Neumann agreed to leave the company in October, after securing a SoftBank exit package worth up to $ 1.7 billion.
Neumann sought to branch the WeWork concept into areas such as education and made a flurry of acquisitions, many of which the company is now trying to dispose of.
Reporting by Joshua Franklin in New York; Edition by Bernadette Baum