While some of its domestic competitors show signs of stumbling, Chinese co-working giant Ucommune has raised RMB 200 million ($29.8 million) in a round backed by a real estate affiliate of Chinese industrial conglomerate Beijing Xingpai Group, according to information from mainland investment data provider Tianyancha.
Ucommune, which is led by former China Vanke executive Mao Daqing, has yet to make a formal announcement regarding the latest round of funding, the Beijing-based company had said that it was valued at $3 billion in its previous funding round in November last year.
News of the fresh backing for Ucommune, which at 200 locations is said to be China’s largest home-grown shared office provider comes less than one week after news surfaced that another Beijing-based co-working contender, Kr Space, had surrendered an $840,000 per month lease in Hong Kong. Market studies published in recent months have shown quickening consolidation in China’s shared office sector.
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According to local media accounts, Ucommune will use the capital injection, which was made through Beijing Xingpai’s Longxi Properties division, to finance construction of new co-working locations.
Beijing Xingpai. which also controls developer Beijing Xingrui, two years ago led a RMB 800 million investment in Ucommune and its then affiliate 5LMeet. Best known for its pool tables, the manufacturer and real estate developer said at the time of its 2017 investment that it was investing in the co-working space operator due to the “urgent need for industrial transformation and upgrading in China.”
Ucommune boss Mao Daqing had said in May last year that Ucommune, which achieved notoriety through its trademark battle with WeWork over the Chinese company’s then English name, UrWork, was considering a NASDAQ IPO within the next two to three years.
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In November last year, the four-year-old shared office provider had raised its biggest tranche of new capital ever, bringing in $200 million to further accelerate the expansion of its global footprint.
That deal, described as D-round funding, followed just three months after the company took in $44 million in a Series C investment in August 2018, and pushed Ucommune’s valuation to $3 billion — up from $1.8 billion after its C round.
In October, Ucommune acquired Shanghai-based rival Fountown to increase its total number of workstations to 100,000, across 200 co-working centers in 37 cities including Singapore, New York, Beijing, Taipei, Hong Kong and Shanghai.
The company also said in November that. over the next three years, it expected to expand to 350 locations in 40 cities providing nearly 200,000 workstations and a total area of 1.3 million square meters.
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Before this latest news, Ucommune had stayed low profile in 2019 as a slowdown in venture capital financing has swept the shared office sector.
In January, WeWork announced a fresh $2 billion investment from Softbank which represented around an 88 percent downsizing from the $16 billion commitment that Softbank was earlier said to putting into the New York-based real estate firm, as market turbulence and reported opposition from among Softbank’s investment partners apparently scuttled the earlier plan.
Earlier this month, Kr Space surrendered its lease in Hong Kong’s One Hennessy after the three-year-old company was reported recently to have closed several locations on the mainland after failing to close an expected funding round last year.
Forty companies in the share-office sector vanished in the 10 months from January to October 2018, according to a report by the China Real Estate Chamber of Commerce, with the research by the real estate non-profit finding that about 40 percent of existing co-working projects are more than half empty.