Hony, SoftBank commit $500m to WeWork China unit
US-based co-working space operator WeWork has raised $500 million from investors led by Hony Capital and Japan’s SoftBank to create a dedicated Chinese entity as part of efforts to compete with local rivals.
Other investors in the consortium include China Oceanwide, Greenland Group, Jin Jiang International, and Legend Holdings. The formation of WeWork China follows a similar move in Japan, where SoftBank and WeWork last week announced a joint venture.
WeWork China will be run by Christian Lee, who was previously the company’s global CFO, while SoftBank and Hony will each a minority stake in the unit. The investment will allow WeWork to expand its operations into new cities next year, adding to a footprint that currently comprises Beijing, Hong Kong, and Shanghai.
WeWork launched in mainland China and Hong Kong one year ago and has eight locations in operation with three more to open soon. It expects to have about 15,000 Chinese members by the end of this year. On a global level, the company provides shared office space for entrepreneurs, freelancers, and large corporations in more than 155 locations in 50 cities across 15 countries.
China-focused Hony first invested in WeWork last year, having led a Series F found which was earmarked for Asian expansion. The GP brought in Legend Holdings, Jin Jiang, Greenland and China Oceanwide as co-investors.
“Since coming to China only a year ago, we’ve been able to establish a vibrant community of creators and companies - and we’ve only just begun. With Hony Capital and SoftBank’s financial support and deep expertise in the region, we’ll substantially grow our membership base in China and make WeWork the preeminent workspace solution and community in greater China,” said Adam Neumann, co-founder and CEO of WeWork, in a statement.
Co-working spaces are proliferating in Asia as companies – from multinationals to start-ups – opt for more flexible real estate arrangements. In China, WeWork competes with local players such as UrWork and Naked Hub, both of which have entered into mergers in the last year in order to build scale. UrWork teamed up with New Space while Naked Hub is joining forces with Singapore-based JustCo.
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