Sino-Ocean, Huarong Rongde Lead $78M Bet on Co-Working Startup Nashwork

Sino-Ocean Capital and Huarong Rongde Asset Management have become the latest Chinese investors to bet on co-working, leading a RMB 500 million ($78 million) financing round in Beijing-based flexible office operator Nashwork.

The fresh investment round, announced on Nashwork’s official WeChat account, brings the company’s total funds raised to $112.7 million. Sino-Ocean Capital is the investment arm of state-owned development giant Sino-Ocean Group Holding. Huarong Rongde Asset Management is an investment platform set up by state-owned bad debt manager China Huarong Asset Management Corporation, in partnership with foreign investors including Deutsche Bank AG and Clearwater Capital Partners.

China Money Network first reported on the investment round for Nashwork, which extends a flurry of capital raises, mergers and acquisitions in China’s buoyant shared office industry.

Nashwork Builds a National Co-Working Network

Founded in 2013, Nashwork operates more than 800,000 square metres of properties across Beijing, Tianjin, Shanghai, and Shenzhen, and has served over 11,000 firms. The company is helmed by co-founder Zhang Jian, who formerly was a senior executive with Beijing-based real estate agency 5i5j.com.

Nashwork pulled in $4.5 million in a series A round in June 2015, followed by a $30 million series B round from Beijing KunLun Wanwei Technologies in July 2016, according to Crunchbase.

Nashwork said in the statement that it would use the new capital to upgrade property assets and generate greater returns for investors. The startup also signed a cooperation agreement with Sino-Ocean Capital under which the two parties will create a fund dedicated to office properties and Nashwork will manage a set of projects backed by the investment firm.

Another Co-Working Startup Taps Deal Craze

The latest investment in Nashwork deepens the co-working commitments of Sino-Ocean Group, which formed a partnership with US flexible office giant WeWork in November 2016. The Beijing-based, Hong Kong-listed subsidiary of China’s COSCO transportation giant agreed to collaborate with WeWork on setting up three co-working centres in China.

China’s co-working sector has seen a spate of deals in recent months. Beijing-based flexible office unicorn and prolific fundraiser Ucommune merged with Shanghai-headquartered Workingdom last month, after WeWork acquired mainland rival naked Hub in April. Kr Space, a spin-off of Alibaba-backed tech media firm 36Kr, is also reported to be seeking at least $200 million for a new funding round that could take the co-working firm’s valuation to $1.3 billion.