Goldman Sachs, PAG Bet on Chinese Co-Working Startup Atlas

China’s co-working market is getting crowded, but a pair of global investment heavyweights are betting that there’s still room for another flexible office brand. Atlas, a Chinese provider of innovative workspaces affiliated with Agile Property, has won a long-term strategic investment from Goldman Sachs and PAG Real Estate, according to a statement by the Guangzhou-based firm.

The value of the investment by the US financial services behemoth and the Hong Kong-based alternative investment manager was undisclosed.

Established in June of last year, Atlas provides office spaces and services in downtown grade A properties. The company operates three venues in Guangzhou and is set to expand to Beijing, Shanghai, Shenzhen and Hong Kong this year, according to an article published on its corporate WeChat account.

Seven-Month-Old Workspace Startup Gets a Boost

“Both of our long-term strategic investors are renowned in the investment industry with respectable AUM and great influence in the market, which will provide solid financial support and branding impact for ATLAS’ expansion in core PRC cities and overseas in the next three years,” Atlas’ management team commented in the statement.

Atlas chief executive Chen Si Lang (Ron) is the eldest son of developer Agile Property’s chairman Chen Zhuo Lin. The startup’s major stakeholder is Byron Asset Management, an asset manager of the elder Chen’s family, which also provided the initial capital for Atlas, the CEO said in an interview with the Hong Kong Economic Journal.

Agile Property, a Guangdong-based developer listed in Hong Kong, is ranked 22nd among mainland developers with a contracted sales volume of RMB 90 billion ($13.8 billion) last year.

Atlas’s latest cooperation with PAG Real Estate and Goldman Sachs comes just after the seven-month-old startup announced that it had leased a 50,000 square foot (4,645 square metre) office space in Tsim Sha Tsui’s Harbour City for its first centre in Hong Kong. Office rent for Harbour City is reported to range from HK$50 to 60 ($6.4 to 7.7) per square foot, which would imply a total monthly rent of between HK$2.5 million and $3 million ($319,752 to 383,686) for the co-working tenant.

The operator provides space and services under three brands, namely ATLAS Workplace, ATLAS Living Space and ATLAS Community. ATLAS Workplace offers flexible one-stop work solutions, including co-working spaces and serviced offices.

Throwing Cash at Chinese Co-working

Atlas joins a growing list of mainland flexible office ventures that have attracted funding from Chinese and global investors. Beijing-based rival Ucommune (formerly known as UrWork) announced in December it had raised RMB 300 million ($46 million) from a trio of mainland investment firms, led by Shenzhen-based Qianhai Wutong Mergers and Acquisitions Funds. The series C funding round valued the company headed by former Vanke executive Mao Daqing at RMB 9 billion ($1.3 billion).

Kr Space, a spinoff of Alibaba-backed tech platform 36K, has raised a total of RMB 1.1 billion ($170 million) from a roster of mainland investors including IDG Capital. The startup most recently completed a RMB 600 million ($92 million) financing round to accelerate its expansion in China’s top-tier cities earlier this month.

Goldman Sachs, PAG Like Chinese Startups

Goldman Sachs is a longtime investor in Chinese startups, having placed a $3.3 million bet on e-commerce firm Alibaba as early as 1999. The New York-based investment bank has more recently backed online healthcare startup Guahao, food ordering platform Meican, and pet products website Boqii.

PAG Real Estate invests in alternative assets including properties, developments and real estate firms in Asia with a focus on Greater China. Last November, the company with around $18 billion in funds under management bought a controlling stake in Zhenai, Inc, China’s largest dating platform. PAG is also a major investor in global real estate consultancy Cushman & Wakefield.