Latest fundraising pushes UR Work’s valuation over 1$bn
Rising rents, cutthroat competition and increasingly impatient investors heaping huge financial pressure on co-working space providers
UR Work, China’s equivalent of the world’s largest co-working space provider, US-based WeWork, has completed a series-B fundraising worth US$581 million (4 billion yuan), that valued the company at US$1.02 billion, making it the country’s first so-called “unicorn” (a start-up firm with worth more than a US$1 billion) in the domestic sector.
The Beijing-based brand attracting five investors including Tianhong Asset Management, the sole partner of online giant Alibaba in the sale of popular Yu’ebao money market funds , and Junfa Property, a Yunnan property firm.
Yu’eBao is sold on Alibaba’s Alipay platform, and can be used to make credit-card payments and buy products. Alibaba owns the South China Morning Post.
UR Work’s fresh fundraising comes just six months after its last, which valued the company at
nearly US$800 million. So far the firm has held six fundraising rounds that have generated an enviable investors list, including Sequoia Capital, Zhen Fund and Gopher Asset.
UR Work was founded by China Vanke’s former Beijing president Mao Daqing in April 2015. Of the 40 sites it has now set up since, about half are located in Beijing, with the remainder spread across nine other cities.
Rather than owning properties, UR Work signs long-term leases of 10 to 15 years to remain asset-light.
The co-working space sector is already fiercely competitive. Many offer chic working environments, modern furniture and the free use of smart services.
Between the Chinese capital and Shanghai, more than 500 co-working sites have been set up over the past 18 months, JLL data shows.
Most existing urban offices are sub-let to small companies. But as the pace of “mass entrepreneurship” – championed by Premier Li Keqiang – has faded many start-ups have fallen by the wayside, the victims of rising rents, cutthroat competition and increasingly impatient investors, which are also challenging a growing number of co-working space operators.
“Time is a critical for the survival of such start-ups as this is an arena that only allows a few winners, just like other sharing economy sub-sector. Those who get funding first, get the chance to win, “ said Ding Zuyu, co-President for E-House (China) Holdings.
UR Work says it is seeking expansion overseas, with planned new sites in Singapore, New York, London and Taiwan.
In early December, it signed an agreement with International Enterprise Singapore and CapitaLand Limited, hoping to help Chinese and Singaporean small firms to enter the global market.