Kr Space is said to be seeking to raise no less than $200 million in a new funding round, as the Beijing-based coworking space operator strives to give WeWork a run for its money in China.
Kr Space, the spinoff of Alibaba-backed tech media firm 36Kr, would use the funds to support further expansion, according to a Bloomberg account citing people familiar with the matter. The Beijing-based company aims to achieve a valuation of about $1.3 billion after the fundraising, the report says.
The flexible space operator is also said to be weighing the option of merging with a competitor in the industry. Kr Space did not respond to enquiry by Mingtiandi at the time of publication.
Vows to Become WeWork
The reported fundraising plan comes as Kr Space embarks on rapid expansion, with the ambition of rivalling US shared office giant WeWork. Earlier this month, vice president Sean Qian told the media that the company plans “to become an international co-working operator. We hope to be on the same level as WeWork in two to three years.”
The Chinese startup announced last week that it plans to open 12 centres across Beijing and Shanghai over the next three months. The new 100,000 square metre centres will yield over 10,000 workstations in areas such as the Guomao business district and Wangfujing in Beijing, and the Lujiazui financial district and Bund area in Shanghai.
The planned new locations will boost the company’s portfolio to over 40 office locations and 300,000 square meters of co-working space across the country, said the firm. Kr Space currently has co-working locations in ten mainland cities including Beijing, Shanghai, Hangzhou, Nanjing and Wuhan, with an occupancy rate for its mature centres of 95 percent, according to the company.
In the first four months of this year alone, the flexible office operator has added 20 centres with a combined area of 150,000 square metres to its portfolio.
Kr Space Ventures Abroad
In addition to its domestic growth, Kr Space might channel any fresh funds into building out its overseas portfolio. Kr Space’s co-founder Liu Chengcheng said in a statement last month that the company is planning on exploring foreign markets in the next three years.
“Kr Space has quickly established itself as a leader in China, and over the next three years, we want to expand our market share by bringing our high-quality office space to more cities across the country and around the world,” Liu said.
The company has picked Hong Kong for its first centre outside of mainland China by leasing seven stories in the One Hennessy office building in Wan Chai last month.
Coworking Operator Won RMB 1.1B in Two Years
At the beginning of the year, Kr Space completed a RMB 600 million ($92 million) financing round to accelerate its expansion across the country, bringing its total funds raised to RMB 1.1 billion ($170 million).
Since it was spun off from 36 Kr in January 2016, Kr Space has secured investment from venture capital firms IDG Capital, China Minsheng Investment Management, Gobi Partners, Unity Ventures, Colony New Yangtze Fund, and Prometheus Capital, a fund established by Chinese tycoon Wang Jianlin’s son Wang Sicong.