WeWork’s cash burn slows, gets $1.1 billion in new financing from SoftBank Group Corp

Shared office provider, WeWork told employees that it has managed to slow down its cash burn rate by nearly 50% from December 31, 2019 and that it has secured a $1.1 billion finance commitment from its majority owner SoftBank Group Corp.

In an e-mail to employees, the company said, while the coronavirus pandemic had hurt its business its financial position continues to remain strong.

“Our early efforts to become a more streamlined, cash-conscious organization puts us in a better position to adapt quickly, navigate new realities and deliver our future business objectives,” said Kimberly Ross, chief financial officer of WeWork, in the e-mail.

WeWork’s revenue in the current quarter have touched $882 million, up by 9% from a year ago, said Ross. Incidentally, during the first quarter of this year, WeWork had reported a first quarter revenue of $1.1 billion – the first time it had exceeded nine figures; it also reported a slowdown in its cash burn to $482 million.

According to a report from the Financial Times, WeWork has $4.1 billion in cash; this includes unfunded cash commitments, as well as the $1.1 billion in new financing.

WeWork expects to be cash flow positive in 2021, said a report from the Financial Times.

According to a SoftBank source, the $1.1 billion financing deal is the last of the debt facilities included in a wide-ranging transaction announced in October 2019.

Incidentally, WeWork ended the quarter with 612,000 in its headcount; during the previous quarter it had reported 693,000 in its roster.

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