Chinese Co-working Space Giant Ucommune Raises RMB 300 Million at $1.8 Billion Valuation

Ucommune, previously UrWork, the only Chinese unicorn in the co-working space, announced on August 14 that the company received a new round of funding from RK Properties and Jingrong Holdings, raising 300 million yuan ($45 million) at a post-money valuation of $ 1.8 billion.

Ucommune received this financing shortly after the completion of its C+ round on June 8. This is the third time that Jingrong Holdings has made additional investments into the co-working space startup. The first two capital increases were in July and October 2017.

According to reports, Ucommune saw a positive operating cash flow last week, marking the first time that a shared office operator has achieved an operational gain. It implicates that this industry leader with 160 co-working sites in 35 cities worldwide is the first to bid farewell to the “burning cash” era of the co-working industry.

Ucommue coworking space
Ucommue, Chinese unicorn in the co-working space (image source: TechCrunch)

Since the beginning of 2018, several co-working space brands have been acquired or merged into bigger competitors in the market. Industry resources are increasingly controlled by the leading enterprises as well. The amount of investments received by shared office operators has exceeded 5 billion yuan.

In April, U.S. co-working giant WeWork acquired NakedHub, a Chinese shared office provider, at the price of $400 million. WeWork China also completed its Series B financing of $500 million in July from investors including TrustBridge Partners, Temasek Holdings, SoftBank Group Corp.

In May, Kr Space, another Chinese co-working giant and a spin-off of the tech platform, moved into Hong Kong and rented seven floors in a building in Wan Chai.

According to Sullivan Data Management, the market of shared office in China has increased from 410 million yuan in 2012 to 23.9 billion yuan in 2017, with a compound annual growth rate of 125.2 percent. In 2018, the market will usher in the second growth climax and enter into another growth period.

In the next five years, the growth rate of the co-working space market is expected to maintain at a high level. By 2022, it is estimated that the market will reach 409.22 billion yuan, with a compound annual growth rate of 76.47 percent.