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WeWork is raising a massive $780 million round to become a $17 billion company

Mar 10, 2016, 00:27 IST

WeWork cofounders Miguel McKelvey and Adam NeumannWeWork

WeWork is raising $780 million in new funding that places it at a $17 billion valuation, reports Fortune.

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The super-hot office rental company, which has alrady raised $969 million in funding at a $10 billion valuation, was already the 11th most valuable startup in the world without accounting for this round.

The last we heard of WeWork in November 2015, it was reportedly going after $750 million in debt financing - basically, a loan. It's not clear if WeWork ever actually went through with that move.

Debt financing is structured like a loan to be paid back later, while equity means the lender gets a piece of the company. This round, confirmed by court forms reportedly filed on Tuesday and spotted by VC Experts, would be for equity.

In total, WeWork now has 80 coworking spaces in 23 cities around the globe. WeWork's 30,000 clients range from startups - Business Insider uses a WeWork space out in San Francisco - to big companies like Merck and American Express. Individuals can also buy packages starting at $45 and rent a desk for a day.

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More recently, WeWork began experimenting with a coliving space, WeLive, where people rent part of a living space and take part in shared amenities as part of the deal.

Melia Robinson/Business Insider

WeWork also has its its critics; the company settled a dispute over its custodial services in late 2015. And though WeWork became profitable as of the summer of 2015, some skeptics believe its financials may not support its valuation, suggesting it could be part of a new technology bubble.

And there are basic concerns about the sustainability of its business model. WeWork is basically in the real estate business - it takes out large leases in buildings then sublets the space to smaller companies. And the real estate business can be risky.

WeWork did not immediately respond to a request for comment.

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