Investors are continuing to bet on China’s flexible real estate startups as a trio of sharing economy property players have raised a combined $136 million in new funding from venture capitalists and mainland corporates.
The new commitments include RMB 400 million ($58 million) each for former Vanke executive Mao Daqing’s WeWork replica URWork as well as for his co-working/co-living hybrid 5LMeet. The funding comes from a Beijing-based sporting goods manufacturer and property developer which announced the investments on its website.
The burst of new cash increased Mao Daqing’s venture war chest, with URWork and 5LMeet now valued at a combined RMB 12 billion ($1.75 billion). The cash will come in handy in what’s increasingly looking like a winner-take-all battle for dominance of China’s co-working sector.
Pool Table Maker Jumps into the Co-Working Game
Mao’s URWork and 5LMeet are already backed by some of the world’s best known investors, with Silicon Valley heavyweight Sequoia Capital being among URWork’s early backers, and Singaporean sovereign wealth fund GIC having led a RMB 100 million investment in 5LMeet in February.
In this latest round of funding for Mao’s startups, the cash comes from a little-known mainland sporting goods maker, Beijing Xingpai. Best known for its pool tables the manufacturer and real estate developer said in an announcement on its website that is investing in URWork and 5LMeet due to the “urgent need for industrial transformation and upgrading in China, and the excellent quality of URWork and 5LMeet’s facilities.”
Beijing Xingpai chairman Gan Lianfang, whose company also controls developer Beijing Xingrui and the Beijing Hospitality Institute, said that the investment in URWork and 5LMeet was not only for the investment return, but would also help speed the transformation of the traditional real estate industry.
Upping the Stakes for China Shared Space Startups
The new capital will come in handy for Mao’s two ventures, which are battling an increasingly cashed up group of competitors in China.
MyDreamPlus, which like URWork and 5LMeet is based in Beijing, raised $20 million in a series B round last month led by Joy Capital, a venture firm founded by former Legend Holdings executives, according to recent media reports. MyDreamPlus now has 16 locations in Beijing.
Earlier this month, however, URWork inked a merger agreement with rival New Space to create a RMB 9 billion co-working operation with a network of nearly 100 co-working centres across mainland China.
China’s co-working sector now has more than 50 significant competitors operating more than 300 flexible office centres nationally, according to research by Mingtiandi.
URWork is also gearing up to expand overseas, with the company said to be opening its first center outside of China in Singapore this July.
Co-Living Can Get You RMB 1 Billion Per Centre
While less well known than URWork, 5LMeet still managed to raise its RMB 100 million in February from a group of investors led by GIC and Kaifeng Culture Tourism Investment Group, a local government fund based in China’s Henan province. That investment valued the startup at RMB 3 billion ($292 million).
With this latest RMB 400 million from Beijing Xingpai, the company has now raised RMB 900 million in venture funding and also has angel funding from Sequoia Capital China and Zhen Fund.
5LMeet,, which was founded in December 2015, combines flexible office facilities with dining and rental apartments. The startup now lists three Beijing locations on its website, and at its current valuation the co-working, co-living combo project stands out for its ability to achieve RMB 1 billion ($146 million) for each centre it has opened.