Ucommune, a major Chinese co-working space, is looking to raise yet another $200m in a Series D financing round in the lead up to its 2019 initial public offering (IPO), according to a recent account by Bloomberg.
Mao Daqing, the founder of Ucommune, revealed in an interview on the sidelines of the opening ceremony for his company’s second co-working space in Singapore his plan to list the company on the Hong Kong Exchange (HKEx).
This disclosure follows an earlier $43m financing round that brought its valuation to $1.8b, suggesting increased funding needs as competition in China’s co-working sector escalates and spills over into Southeast Asia.
In a 2017 report, global real estate services firm Cushman & Wakefield observed: “The start-up boom and enormous business potential are attracting some established coworking operators to the region. WeWork has already signaled its plans by acquiring Spacemob. JustCo, a popular Singapore coworking operator has recently secured funds (of about US$ 12 million) to support its expansion plans in Southeast Asia.”
It added: “Impact Hub, another major global operator, is already stationed in Jakarta, Manila and Kuala Lumpur. Ucommune, a major Chinese coworking player is also eyeing Southeast Asia. As such, the battle for coworking dominance will further intensify in 2018.”
In June, the EastWestBank suggested in a corporate blog post that the sector would see further consolidation. UCommune launched a branch in downtown Manhattan earlier this year, with plans to expand to Los Angeles. Moreover, it has partnered with Serendipity Labs Coworking in the U.S. to launch in New York City’s financial district, in a building owned by Chinese conglomerate Fosun.
Mao Daqing, founder and chairman of UCommune, commented: “Today’s workforce is mobile, and they demand professional office space, with world-class offices and amenities.”
WeWork, UCommune’s main competitor, recently took the competition up another notch with the close of a $500m Series B financing round in July to fund further expansion in China. In addition, it secured $1b in debt from Japanese investor SoftBank.
Other Chinese co-working players are also looking to raise additional funding in response; Chinese co-working space provider Kr Space – an affiliate established by Kr-Asia’s parent firm 36Kr – is set to close another financing round in addition to the $1b it just received from investors.
”There are many China-specific requirements. I don’t think WeWork really understood all of these in its early days here, which was why they were expanding slowly,” says Liu Chengcheng, the founder of Kr Space, in an interview with Forbes, hinting of his belief in the home ground advantage that Kr Space has over WeWork.
MyDreamPlus, another Chinese co-working operator, recently closed a Hillhouse Capital-led $120m financing round.
Editor: Shiwen Yap
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