Women’s coworking startup The Wing took a huge valuation cut when WeWork sold its stake

Women’s coworking startup The Wing’s, once valued at as much as $365 million, has seen its valuation plunge to around$200 million, Bloomberg reported on Friday.

WeWork’s parent company, We Company, sold its stake in The Wing this January to a group of investors led by GV (formerly Google Ventures), and previous investors Sequoia Capital and NEA, Fortune initially reported in January.

The Bloomberg report detailed additional investors in the deal including CAA Ventures, the venture investment arm of the Hollywood talent agency, real estate investment firm DivcoWest, Avid Ventures, and DAG Ventures. Existing investor Crankstart Foundation also participated. 

Business Insider reported last month that in its new Williamsburg location, The Wing was no longer providing on-site childcare through its Little Wing subsidiary, and was instead waiving a $100 membership fee for its members to use an external childcare company. The changes did not sit well with working moms that had received little heads up about the switch. 

WeWork’s stake in The Wing had reportedly been for sale since October 2019, shortly after CEO Adam Neumann stepped down from helming the company he founded and WeWork’s planned IPO imploded. WeWork first invested in The Wing in 2017. According to WeWork’s S-1 filing, the company owned a 23% stake in The Wing, valued at $58.8 million in June 2019.

WeWork’s stake was bought by a range of previous and new investors at a valuation of $165 million. Other than purchasing WeWork’s stake, investors also provided an additional $15 million through a convertible bond, which will convert when the company raises more capital and hits a $365 million valuation. These two transactions combined valued The Wing around $200 million.

“Our investors were able to take advantage of a unique and unexpected opportunity with WeWork. They doubled down on their commitment to the company by increasing their ownership and putting an additional $15 million in new capital that will help us grow and scale,” a spokesperson for The Wing told Business Insider. They declined to give any further comment on the deal.

WeWork recorded a $17 million loss from the transaction, according to the Bloomberg report. WeWork declined to comment to Business Insider.

WeWork is in the process of slashing jobs and shuttering or selling several non-core investments. Earlier this week, WeWork sold facilities-management company Managed by Q to rival facilities-management company Eden for $25 million, a 90% discount from what WeWork paid for the business in 2019.

WeWork has also sold workplace software provider Teem and content marketer Conductor and shuttered restaurant coworking subsidiary Spacious as it tries to stabilize. WeWork’s new CEO, Sandeep Mathrani, joined the company last month.

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