Chinese Coworking Giant Seeks US IPO

Beijing-based UCommune is reportedly aiming to raise as much as $200 million through the offering, as China’s flexible office sector shows signs of overheating.
UCommune center. Image courtesy of UCommune

Chinese coworking startup UCommune is reportedly gearing up for a U.S. initial public offering, which could help the loss-making firm stay afloat as the flexible office sector is showing signs of overheating in the world’s most populous country.

The Beijing-based firm is looking to raise anywhere from $100 million to $200 million in a 2020 IPO, according to sources cited by Bloomberg. The deal is said to be in the preliminary stages and could change. The company formerly known as UrWork had targeted an IPO in the third quarter of 2018, but held off amid market uncertainty caused by the U.S.-China trade dispute, the report added.


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Founded in 2015, UCommune is China’s largest rival to WeWork, whose parent company The We Co. has filed for an IPO with U.S. regulators. UCommune’s coworking platform spans 200 locations across 37 cities, with more than 100,000 members, according to its corporate website.

In addition to its home turf of mainland China, the company has also opened a number of spaces in Hong Kong, Singapore, Taiwan and the U.S. The company claims a valuation of $3 billion after closing on a $200 million Series D funding round last November.

Flexible office overheats in China

UCommune grew rapidly by snapping up a series of smaller rivals, most recently Shanghai-based Fountown. The company faces competition from domestic players including Alibaba-backed Kr Space and MyDreamPlus, as well as U.S. shared office giant WeWork, which entered the China market in 2016.

WeWork, which currently has 79 locations open or announced in mainland China and 14 in Hong Kong, acquired China-based rival Naked Hub for $400 million last year. WeWork China received two investments of $500 million each in 2017 and 2018 from Japan’s SoftBank Group and other backers to fuel its expansion in the country.

Mainland China’s coworking sector is undergoing consolidation after years of heated growth. According to industry association the China Real Estate Chamber of Commerce, 40 shared office companies disappeared from January to October 2018, while about 40 percent of coworking projects were more than half-empty as of October. Analysts cite high operating costs and a dearth of new funding as drivers of the mounting industry woes.

A new report by The Instant Group finds that flexible office supply surged by 20 percent last year in Shanghai, reaching a total of 239 centers. Beijing now has 219 locations, growing 24 percent, while Hong Kong Island has 322 centers, rising 21 percent.