By Kevin Kelleher
January 7, 2019

Japanese software giant Softbank is significantly scaling back its plans for investing in shared-office provider WeWork. The investment, valued at around $16 billion in late 2018, will now be closer to $2 billion, the Financial Times reported.

Softbank, which has been building up stakes in tech companies from Nvidia to Uber through its ambitious $100 billion Vision Fund, may announce the funding as soon as this week, the FT said. The reduced investment will not involve the participation of the Vision Fund, which has built up a sizable stake in WeWork.

Softbank previously invested $8 billion in the company, including a $3 billion in funding last November. At the time, WeWork was said to have lost $1.22 billion during the first nine months 2018, compared to a loss of $933 million for all of in 2017.

In October, reports indicated that Softbank was planning on buying a majority stake in WeWork, in a deal that was then valued between $15 billion and $20 billion. But by last month, key investors in the Vision Fund, including sovereign funds of Saudi Arabia and Abu Dhabi, expressed concerns about the deal.

The plunge in many tech stocks in the past several months has caused potential problems for Softbank’s Vision Fund, which was set up by CEO Masayoshi Son to invest with a 100-year outlook. Nvidia, which the Vision Fund owns a stake in, has lost nearly half its value since late September.

Also on Monday, The Information said that Uber, another tech company that the Vision Fund holds a stake in, could see its valuation in a planned IPO fall to $90 billion, down from an earlier estimate of a $120 billion valuation.

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