WeWork announced on Sunday that its deal with Gympass has been finalized. The U.S based office-sharing company will now be accommodating 250 of the gym membership app company’s employees. As per the analysts, the latest development is a hint at WeWork’s current owner, SoftBank Group Corp, using its network to improve business conditions for WeWork.
As per the sources, SoftBank is a prominent investor in Gympass as well. While the Japanese multinational conglomerate holding company doesn’t have controlling power over Gympass, it does have a say in promoting its collaboration with the other companies on its portfolio.
WeWork Currently Accommodates Over 25,000 Employees Of SoftBank-Backed Companies
According to an estimate, multiple of the Softbank-backed businesses like American ride-hailing service Uber, an online marketplace for real estate Compass, and Brazilian QuintoAndar that is an online housing broker, are currently using WeWork offices that accommodate as many as 25,000 of their employees.
SoftBank had made a sizeable investment in WeWork last year to win a majority control and protect the company against bankruptcy. Promoting collaboration with its portfolio companies, the Japanese conglomerate hopes to bring the office-sharing startup back to its feet. SoftBank had also tried an initial public offering (IPO) for WeWork in September 2019, after the failure of which, fundraising to support business operations has been a challenge for SoftBank.
Under the previous owner in 2019’s third quarter, WeWork had noted a massive net loss of $1.25 billion that marked more than a 100% hike year over year. As per the current statistics, the total number of subscribers for WeWork is currently at 650,000 across the globe. By 2021, WeWork is expected to hit the 1 million mark for worldwide subscribers.
WeWork To Establish A New Office For Gympass In Manhattan
Gympass was originally a Brazilian startup but is now operational in New York as well. The company has signed a contract spanning over three years with WeWork that will establish a new office for Gympass in Manhattan’s SoHo area. The latest agreement is likely to triple Gympass’s presence in Manhattan. Specifics of the deal concerning its valuation, however, have not been revealed since it is a private agreement.
Gympass is a business directed at corporate clients that wish to improve their employees’ access to gyms. The total number of gyms and studios that the company currently owns across the world is more than 50,000.
SoftBank’s performance in the stock market has remained flat on average in January. At the time of writing, the stock is exchanging hands at 4,575 JPY that marks almost the same level at which it opened the year 2020.