Co-working space WeWork is all set to launch its Chinese unit after it raised $500 million from Hony Capital and SoftBankGroup, one of China’s largest private-equity firms.
WeWork will tap into booming demand for shared office space in the world’s second-largest economy. With the funds raised, it will expand its services to at least 5 other locations in the next 12 months. Currently it is available in Beijing and Shanghai.
State-owned real estate developer Greenland Group and hospitality company Jin Jiang International – parent of Hong Kong-listed Shanghai Jin Jiang International Hotels Group – will also invest in the local unit,said WeWork co-founder and CEO Adam Neumann.
“By creating local entities we allow ourselves to take local management, give them local equity, incentivize them locally, operate the company under local law, respecting all the different cultures and the different rules that exist,” Neumann said.
WeWork provides shared office place for entrepreneurs and freelancers as well as large corporations and operates more than 155 properties in 16 markets including the US, its biggest market, Canada, Germany and China, where it’s present in the country’s two main cities.
“We’re not going to do too much, only in markets that are tremendously large, but in one or two more markets you’re going to see us doing it, probably quite soon,” Neumann said.
In China, WeWork competes with Naked Hub and URWork, and its expansion there comes at a time when certain parts of the Chinese startup ecosystem are starting to contract. WeWork China will be run by Christian Lee, who is the ex-CFO of the company.