After achieving notoriety for having a name that may have too closely resembled the world’s biggest co-working operator, the Beijing-based shared office startup formerly known as UrWork now appears to be imitating the eating habits of Pac-Man as it feasts on smaller co-working players.
Less than two weeks after taking over competitor Woo Space, Mao Daqing’s Ucommune announced that it would acquire Shenzhen flexible office operator WeDo, in an attempt to ramp up its presence in southern China’s second-biggest city.
After this latest acquisition, Ucommune boasts a network of 160 co-working centres globally. Terms of the merger were not announced.
Ucommune Buys WeDo and Quadruples Shenzhen Presence
Prior to this latest merger, Beijing-based Ucommune, which has 45 centres in Beijing and nine in Shanghai, owned just three locations in Shenzhen, its corporate website shows. Founded in 2015 in Shenzhen, WeDo is deep-rooted in the southern first-tier city with 12 coworking spaces serving over 300 enterprises. The acquisition will make Ucommune the biggest coworking player in Shenzhen, further boosting the startup’s portfolio in China’s first-tier cities.
“In the future, Ucommune will strengthen the leadership position through strategic investments and acquisition in Southern China and will link more global resources with its regional coworking spaces,” said Ucommune in the statement. Ucommune currently has 94 centres in mainland China.
Co-Working Operator Tries, Then Buys
As in its acquisition of Woo Space, Ucommune first took a stake in its smaller rival before absorbing the entire business. Still known under its UrWork moniker, Mao Daqing’s firm last July made a strategic investment in WeDo for an unspecified amount. After the latest acquisition, the merged coworking company plans to establish a coworking platform in the Greater Bay area covering Macau, Hongkong and Shenzhen, as part of its globalisation strategy, according to Ucommune.
WeDo currently operates 60,000 square metres of coworking space and also acts as an incubator. It has set up the Global Fintech Technology Laboratory, which successfully incubated more than 10 enterprises.
Mainland Co-Working Industry Heats Up
Acquiring competitors appears to be the new business model for Ucommune, which now claims a $1.7 billion valuation. In April last year, Ucommune agreed to a strategic merger with Beijing-based rival New Space, which had 30 locations in 13 cities.
The Chinese coworking giant is expected to see more competition from its rivals as the industry races to raise capital for expansions. Just last week, Beijing-based developer Soho China said it plans to spin off its co-working business 3Q into a separate company, with hopes of eventually launching an IPO for the flexible office unit. Meanwhile, 3Q targets to double its number of co-working desks to 50,000 this year.
Shanghai-based naked Hub announced its own establishment of a real estate fund management business at the beginning of this month, and Kr Space completed a $92 million financing round earlier in January with plans to open 100 centres by 2019.