China's PE-backed Ucommune acquires domestic rival

The purchase price of Woo Space was not disclosed, but in a statement Ucommune said the valuation of the combined company is $1.7 billion. Following the merger the teams will focus on platform upgrades, integrating the companies’ membership systems, building a combined database and standardizing community operation services.

Woo Space operates 23 co-working space locations across China, covering 100,000 square meters and servicing more than 700 enterprises. Its investors include Matrix China, Xinli Capital Group and Qingshan Capital. The merger is expected to bring Ucommune’s total membership to over 200,000.

"Woo Space is a team that I have admired and followed closely,” said Ucommune founder and Chairman Daqing Mao. “The 1990s-born CEO has deep insights into the needs of young people in the coworking space and keen on developing the potential of youths. The team's astute ability to identify good location and their knowledge of cross-border relationships within the E-commerce industry have inspired Ucommune."

UrWork was founded in 2015 by Mao, a former vice president at Chinese real estate giant China Vanke, and has raised several rounds of funding, most recently a RMB300 million ($45 million) Series C round in December led by Qianhai Equity Exchange. The company has the support of a number of Chinese strategic and financial investors, including Sinovation Ventures, Prometheus Capital, Banyan Capital, and commercial property developers Yintai Land and Zhongrong International Trust. Sequoia Capital also

UrWork merged with industry peer New Space last year, in a deal said to be the first merger in China’s co-working space market. The company rebranded following the Series C round.

Co-working spaces are proliferating in Asia as companies opt for more flexible real estate arrangements. The most significant challenge for the largest operators such as Ucommune comes from US-based WeWork, which received $4.4 billion from SoftBank Group and the SoftBank Vision Fund last year, including $1.4 billion in commitments to the company’s China, Japan, Southeast Asia and Korea units. Around the same time it acquired Singapore-based counterpart Spacemob for an undisclosed amount.

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• Topics
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• Trade sale
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