Chinese co-working giant Ucommune announced on Wednesday that it has raised its biggest tranche of new capital ever, bringing in $200 million to further accelerate the expansion of its global footprint, according to a company statement.
The deal, described as a D-round funding, follows just three months after the company’s previous round of funding, and pushed Ucommune’s valuation to $3 billion, up from a post-money valuation of $1.8 billion after a Series C investment of $44 million in August this year.
Venture Capitalists Lead Latest Ucommune Round
The new round of funding was led by the Hong Kong-based All-Stars Investment Limited, which has also invested in other mainland and Asian unicorns including Xiaomi, Didi Chuxing, Tujia, and Grab. Also participating in this latest round was Ucommune’s existing investor CEC Capital.
“The recent funding from leading institutional investors in China is recognition of our leading position and operational capabilities and validation of the growth potential of co-working sector in China,” Ucommune founder Mao Daqing said in a statement.
The announcement came on the heels of the news that Softbank added another $3 billion to its investment inWeWork, boosting the valuation of the US co-working pioneer to at least $42 billion.
Ucommune has positioned itself as the primary domestic rival to WeWork in China, even after the New York-based in July raised $500 million in new investment to fuel growth in mainland China and Hong Kong.
Chinese Co-Working Unicorn Aims to Go Global
Ucommune said it will use the proceeds from its latest financing to accelerate its global expansion, strengthen its research and development capabilities, improve its ecosystem and advance its Internet of Things smart office technology.
Company founder Mao Daqing pointed out in the statement the strong growth potential in China’s co-working and smart working technology sectors, bolstered by the country’s urbanization, industrial upgrading and consumption upgrading.
“The investors value Ucommune’s innovation capacity in developing the co-working ecosystem and smart office technology, as well as the instrumental role in enabling the collaboration between industrial players across the entire value chain,” the former Vanke executive added.
In an effort to broaden its range of services, the three-year-old Ucommune also provides integrated co-working solutions such as architectural and interior design service, express financing and SaaS solutions to its tenants, which include some of China’s leading start-ups such as Liulishuo, KEEP, Logic Thinking, Bytedance, Bilibili, ofo, mobike and Tiktok.
Ucommune Grows Through Acquisitions
The Beijing-based co-working company could likely make use of at least some of this new cash to continue funding its growth through acquisition strategy.
In October, Ucommune acquired Shanghai-based rival Fountown to increase its total number of workstations to 100,000, across 200 co-working centres in 37 cities including Singapore, New York, Beijing, Taipei, Hong Kong and Shanghai, according to the statement.
The shared office provider also highlighted in the statement that over the next three years, it is expected to expand to 350 locations in 40 cities, providing nearly 200,000 workstations and a total area of 1.3 million square meters.
For 2018 the company estimates that its annual revenues will have grown by 300 percent compared to last year.
Ucommune Rides Asia’s Co-Working Wave
Ucommune’s expansion comes as flexible office strategies catch on in mainland China and around the region.
By 2020, more than 42 million square meters of space in grade A office buildings in metropolises like Beijing and Shanghai will go to office sharing, up from 33 million square meters in the first quarter of 2018, according to real estate services firm Jones Lang LaSalle.
Beyond mainland China, co-working space providers have been battling for dominance across the Asian region.
After signing its first Hong Kong lease in January, Ucommune is planning to open another centre in Kowloon’s Mongkok district coming next year, and its pair of Singapore centres at Aya Rajah Crescent and Suntec City are said to be at 100 percent and 60 percent capacity respectively.
Earlier this month, WeWork announced the opening of three more centres in Singapore, which will give it 2,500 more desks in Southeast Asia’s largest financial hub. Elsewhere in the Southeast Asian region, the company last week announced plans to open its first centres in the Philippines and Vietnam.
Hong Kong-based co-working outfit Campfire Collective is also muscling in on Singapore’s shared office space, with the start-up announcing two weeks ago it has leased all 16 floors at 139 Cecil Street.
Investor enthusiasm for building more flexible offices has provided funding opportunities for a number of startups in the region, with Beijing-based MyDreamPlus, which has 37 locations across China, having raised $120 million in August in a Series C funding exercise.
Alibaba-backed Kr Space, meanwhile, is said to be seeking to raise no less than $200 million in a new funding round.