Beijing-based flexible office startup URWork has displayed its fundraising prowess once again, announcing it has closed a RMB 1.2 billion ($178 million) round of financing from a group of mainland investors to fuel the $1.3 billion company’s overseas expansion.
For the fresh funding round, URWork brought in two new investors, state-owned real estate developer Beijing Capital Land and Shanghai-based investment firm Prosperity Holdings, following a pair of investments from mainland corporates, Beijing Xingpai (Star) Group, and Beijing Aikang (Love & Health) Group over the last three months.
The new investment comes as URWork heads overseas for the first time in Singapore, while readying plans for a foothold in the US. URWork’s announcement comes fast on the heels of New York-based WeWork revealing a pair of new Asia-based initiatives in the past two weeks.
Mainland Co-Working Giant Adds to Its War Chest
URWork, which is also backed by mainland VC heavyweights Zhen Fund and Sequoia Capital China, is referring to this latest batch of investment as a “pre-C” round, as the company prepares for an expected Series C funding round that it says will value the shared office provider at $1.5 billion.
The new investment will be used upgrade URWork’s facilities and service offerings, as well as to fuel the mainland startup’s expansion into overseas markets, according to founder and CEO Mao Daqing, the former Vanke executive who launched URWork in 2015.
With a current network of 88 locations in more than 22 cities, URWork has said it aims to open another 160 centres in 32 cities worldwide, covering seven million square feet of space over the next three years. URWork’s first overseas location in Singapore had its soft launch in June, and the company is planning to unveil a 34,000 square foot facility in Manhattan this October. Further venues are planned for Los Angeles, San Francisco and London.
SOE Developer Joins Shanghai Private Fund for Latest Round
URWork’s new investor Beijing Capital Land Ltd (BCL), a Hong Kong-listed property firm focused on mainland development, is backed by state-owned Beijing Capital Group (BCG) and Singaporean sovereign wealth fund GIC. The developer’s interest in renovating underused spaces within core business districts meshes well with URWork’s model of turning disused real estate into chic flexible offices.
A growing cohort of mobile young professionals in China creates “an under-utilisation of stock assets,” commented Mao in a statement. “By revitalising the spaces with craft architecture, designer interior and connected technology, we recapture the latent stock spaces, creating more added values.”
URWork’s other new investor, Prosperity (Jingrong) Holdings, is an asset manager with a diverse portfolio that includes residential and commercial property. Prosperity’s investment will specifically support UrWork’s further expansion in the US along with developing its service offerings, according to the statement.
Last month, URWork added Beijing Aikang to its roster of investors, raising RMB 200 million ($29.4 million) from the mainland health care, hospitality and real estate conglomerate. Beijing Xinpai, a sporting goods maker and property developer best known for its pool tables, first linked up with URWork in May, investing RMB 400 million ($58 million) each into URWork and 5LMeet, Mao’s co-working/co-living hybrid.
Asia Co-Working Battle Accelerates
URWork’s new cash will come in handy as WeWork, the world’s largest co-working startup, moves in on the home turf of its similarly-named Chinese rival. The company currently has eight locations in Shanghai, Beijing and Hong Kong with seven more under development.
Less than two weeks ago, the $20 billion US giant announced it had raised $500 million for a new China unit that would fund its expansion into at least five more mainland cities. And this week, WeWork said it was acquiring Singaporean co-working provider Spacemob as the brand invests another $500 million to power its expansion in South Korea and southeast Asia.
Also last month, mainland rival naked Hub announced a merger with Singapore’s Justco to create Asia’s largest premium co-working platform with a network of 41 locations across nine cities in the region.