Post Plunging Quarterly Results, WeWork to Provide Office Space to Gympass
Previous records show the genuine efforts of the majority owner of WeWork – SoftBank Group, in using its links to buoy its business. People familiar with the matter, yesterday, said that marking another example in its plans, WeWork signed a deal with gym membership app firm Gympass.
As per the agreement, WeWork is providing space to 250 employees of Gympass in New York. Although not having full control over it, SoftBank is a minority investor in Gympass. As per one source, the former encourages the portfolio firms of the latter.
WeWork has provided office space to more than 25,000 employees at SoftBank-backed companies, like US ride-hailing firm Uber Technologies, online real estate marketplace Compass and Brazilian online housing broker QuintoAndar.
With this, SoftBank looks forward to encourage turnaround of WeWork post rescuing it from bankruptcy last year by acquiring majority control. After this, the initial public offering launched by WeWork in September also failed, leaving the firm in dire need of cash.
In 2019 Q3, the parent company of WeWork – The We Company’s net losses reached $1.25 billion year-on-year, double than the year earlier.
The three-year-deal with New York headquartered Gympass is mainly for office space in the SoHo area of Manhattan. Sources claim that the agreement will potentially triple the existence of Gympass in the city. The value of the contract has been kept hidden and the firms have urged for anonymity as the deal is private. Data provided by PitchBook claims that Gypass was previously valued at $1 billion in a $300 million fundraising led by SoftBank.
After undergoing long-term losses, WeWork is focusing on expansion in not just the UK, but the Middle East too. Earlier in January this year, WeWork secured an address in Dubai in building four of One Central, an office complex near the World Trade Centre. Sources have reported that the New York based firm is now accepting touring requests from start-ups and companies interested in basing themselves out of its new Dubai location.
On its official website, WeWork announced that currently only hot desks, where multiple workers share the same workspace, are available. In the coming months, private offices and dedicated desks can also be considered. The price of the Dubai base has not been revealed as yet.
The One Central office space is the second location of WeWork in the Middle East. The first facility opened in August last year was a 5,000 square metre facility. It was in Hub71 based at Abu Dhabi Global Market in Al Maryah Island. At this place, private office and dedicated desks for two people costed Dh5,000 and Dh2,600 a month respectively.
Meanwhile, Gympass is also working for future growth. In order to remove the barriers to physical activity for all its colleagues, the firm has joined hands with Britain’s fifth largest supermarket, Aldi. With this, 37000+ UK and Irish colleagues at more than 1,000 stores and 13 offices and distribution centres can now access 2,000 Gympass fitness facilities within the UK and Ireland.
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