Trustbridge assumes control of WeWork China

Yueping Jiang, a partner at Trustbridge, has become acting CEO of WeWork China. The private equity firm - which led a $500 million Series B for WeWork China in 2018 alongside SoftBank Vision Fund, Temasek Holdings, and Hony Capital - said the business had been transformed from a subsidiary of a global company into a Chinese entity that will license its brand and other resources from WeWork.

SoftBank, which previously held 40% of the China business, is the major shareholder in WeWork globally. It agreed a $9.5 billion debt and equity rescue package - at a valuation of $7.88 billion - in September 2019. Three months before that, WeWork was valued at $47 billion and preparing for an IPO. However, investors lost confidence in the company because of its weak governance and precarious financials, as well as the departure of co-founder and CEO Adam Neumann.

Following the bailout, SoftBank founder Masayoshi Son admitted to a lapse in judgment on WeWork. The company was valued at $2.9 billion in May, according to a SoftBank statement.

WeWork entered China in 2016 and has grown to more than 100 locations in 12 cities, serving 65,000 members. It claims to provide flexible office space solutions for global enterprises. This approach has gained traction post-COVID-19 as more companies are reassessing their property exposure - through rental or ownership - and adopting flexible and diverse office space management models.

"Realizing localization, we will be more efficient, more solid, and closer to the needs of the Chinese market. We will coordinate with local partners and strive to take the lead in China's future flexible office market," said Jiang.

Ucommune, WeWork's nearest domestic rival, failed to get traction with a New York IPO last year and was acquired by a US-listed special purpose acquisition company (SPAC) at a valuation of $764.9 million. The business was worth $1.3 billion on merging with industry peer New Space in 2017. Eighteen months later it raised $200 million in private funding.

Investors in Ucommune include Sequoia Capital China, Matrix Partners China, Sinovation Ventures, ZhenFund, Gopher Asset Management, All-Stars Investment, and CEC Capital. They and company management received a 91.8% stake in the listed entity post-combination.

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• Topics
• Greater China
• Buyouts
• China
• Trustbridge
• SoftBank Capital