Co-working startup WeWork is reported to have received up to USD 4 billion financing from SoftBank in February, pushing its valuation to more than USD 20 billion.
Headquartered in New York City, WeWork provides co-working workspaces, also known as shared office spaces, and services for startups.
In preparation for its expansion into China and Asia, the co-working space giant secured USD 430 million financing in March 2016 led by Beijing-based investors which include Hony Capital Ltd. and Legend Holdings. This financing made WeWork, which was founded in 2010, the sixth most valuable private company in 2016 along with Snapchat.
In order to foresee the future, we need to learn from the past. It is highly possible that WeWork will repeat what Uber went through in China – fierce competition with domestic startups that Uber has never met with in other parts of the world.
In February 2016, Uber CEO Travis Kalanick said that Uber China was losing USD 1 billion a year in China. He also accused Uber’s main rival in China, Didi Chuxing, of burning even more cash than them.
Beijing-based UR Work is a major player in the co-working race among domestic and international startups in China.
UR Work was founded by Mao Daqing, formerly the senior vice president of real estate developer Vanke, who started the startup in 2015. The startup is now present in 20 cities including Beijing, Shanghai and Shenzhen, and has a total of 78 shared office venues.
In January, UR Work raised RMB 400 million (USD 58 million) in its Series B financing and valued at RMB 7 billion. On top of that, it formed a strategic partnership with co-working space provider New Space late last month, further pushing its valuation to RMB 9 billion.
In contrast, WeWork has only six shared office venues in Shanghai and Beijing so far. Domestically, UR Work also competes with other local competitors such as COWORK and SOHO 3Q.
The similarities between Uber and WeWork’s positions in China are that deeply rooted domestic startups can grow overwhelmingly fast and can come up with products and services that fit the China market.
Although it is too early to tell who the final winner is, the co-working space race in China will definitely be the next major battlefield between international players and Chinese startups.
(Top photo from Pixabay.com)