The co-working market could be a good investment for Softbank, in spite of its draw to small business startups. According to CNBC, sources close to the company said the plan to finalize a billion-dollar deal in co-working giant WeWork is in the works. The $2 billion investment includes a primary tranche of funding, followed by a secondary round worth more than $1 billion. SoftBank may increase the size of the secondary investment to nearly $2 billion.
The co-working market is booming and continues to grow in New York City and around the country. New York City is home to numerous WeWork locations and its competitors including AlleyNYC, Bar Works, and The Yard.
Marcus Moufarrige, COO of Servcorp, a publicly traded multinational organization that offers co-working hubs in key locations including New York’s World Trade Center, London’s West End and Sydney’s MLC Centre, said that the billion-dollar deal is a sign that co-working is going mainstream, a contrast from its reputation as a niche business product.
“WeWork’s team are excellent marketers and have used a fantastic strategy to mobilize the young worker to demand more flexible space options. They have expanded the flexible workspace market. It is my view, however, that despite their success in marketing flexible space, people will demand more than just glass boxes and varying levels of flexible space offerings including where servcorp fits in the premium end, will also benefit from this growth. I also believe that the market will demand a higher level of service and infrastructure as it learns more about flexible space,” Moufarrige told New York City Wired.
“That leads into the 3rd question that Servcorp is not trying to preserve the old office space model. We believe that not everyone wants to come to work in shorts, ride their scooter to work, play ping pong and have beers at lunch. There will certainly be demand for a premium product in flexible space with a high level of service and infrastructure.”