WeWork, the New York-based flexible office giant, has announced a $500 million investment in a new vehicle to fund its expansion in Southeast Asia and South Korea, in another milestone for the region’s co-working sector.
In tandem with the investment, WeWork is also acquiring Singapore-based co-working provider Spacemob for an undisclosed amount, and appointing its founder and CEO, Turochas “T” Fuad, as WeWork’s managing director of Southeast Asia. The US startup has also named Matt Shampine, currently WeWork’s head of marketing and revenue for Asia, as general manager of Korea.
“Today’s announcement reaffirms WeWork’s commitment to scaling our business across Asia,” Miguel McKelvey, Co-Founder and Chief Culture Officer of WeWork said in a statement. The entrepreneur, who started Wework in 2010 with partner Adam Neumann added, “I speak for the entire WeWork team and our 130,000 members when I say I am incredibly excited to have T and the team from Spacemob join us in our mission to create a world where people work to make a life, not just a living.”
WeWork Finds Partners for Asia Drive
The move comes less than two weeks after WeWork unveiled a $500 million fundraising round to fuel its expansion in mainland China. That earlier round of Asia-targetted financing came shortly after the $20 billion startup said it was teaming up with Japan’s SoftBank to bring its co-working model to Tokyo. The just-announced investment in southeast Asia and Korea is said to be new capital from a different source, though WeWork has not disclosed the investors.
Co-working platform Spacemob, which Fuad founded in early 2016, currently has a flagship location at Singapore’s 8 Claymore Hill and another space which it opened in partnership with Ascendas-Singbridge at 2 Science Park Drive. The company backed by Vertex Ventures and Alpha JWC Ventures plans to roll out further locations in Indonesia and Vietnam.
“I could not be more proud to lead WeWork’s expansion in Southeast Asia,” commented Fuad in a statement. “The region represents close to nine percent of the world’s population, it is an exciting market full of budding entrepreneurs, enterprises and creators, and that is a massive opportunity for WeWork.”
Fuad, whose Spacemob team of around 20 people will be folded into WeWork, will lead WeWork’s expansion in southeast Asia. Fuad previously founded and sold two startups, the second of which, travelmob, was acquired by Airbnb rival HomeAway in 2013. The repeat entrepreneur has also held senior regional roles at Yahoo! and Skype.
WeWork’s new head of Korea, Shampine, joined the shared office platform’s main operation in 2013 as director of strategic partnerships after co-founding the company’s early stage startup incubator WeWork Labs. More recently, Shampine played a lead role in launching WeWork’s Asian presence.
Both Fuad and Shampine will be reporting to Christian Lee, managing director of WeWork Asia. The M&A veteran who joined the company in 2015 has recently been tapped for the Shanghai-based role where he will manage WeWork’s China operations and oversee the firm’s expansion in Asia Pacific.
US Startup Vies for Asian Leadership
Founded in 2010, WeWork has grown to over 163 locations across 52 cities in 15 countries worldwide. The company launched its first Asian co-working centre in Shanghai’s Jing An district just over a year ago and currently has eight locations in Shanghai, Beijing and Hong Kong, with seven more on the way, representing a grand total of 15,000 desks in China. WeWork also has three locations in Seoul, after launching its first centre in the city’s Gangnam district last August.
Less than two weeks ago, WeWork announced it had raised $500 million for a new vehicle to fund a major push into China that would expand the brand’s network from six co-working centres in Shanghai and Beijing to at least five more cities in the mainland. Japan’s SoftBank and China’s Hony Capital are leading the investment in the new entity, called WeWork China, in which WeWork holds a majority stake.
Regional Competitors Matching WeWork Moves
WeWork’s Asia push comes as regional rivals ramp up their platforms in the increasingly competitive co-working sector. Shanghai-based naked Hub and Singapore’s JustGroup last month announced a merger to create Asia’s largest premium co-working platform. The tie-up between the two high-end office providers will create a portfolio of 41 locations totalling 140,000 square metres of space under management across nine cities in six countries.
The combined company will expand beyond its home markets of China and Singapore to develop southeast Asian centres in Bangkok, Kuala Lumpur, Manila, Hanoi, Ho Chi Minh City and Jakarta, with the aim of serving a clientele of 8,000 firms and 32,000 members.
Beijing-based URWork, another major WeWork rival in the region, has also landed in Singapore, recently setting up its first overseas location in the city-state. The $1.3 billion startup founded by former Vanke executive Mao Daqing has around 100 centres across mainland China following a strategic merger with a local competitor in April. UrWork is aiming for 100,000 seats across 160 new locations in 32 cities globally over the next three years, including a center in WeWork’s home turf of Manhattan later this year.