Back in December of 2015, Liz Elam, Founder of the Global Coworking Unconference Conference told Allwork that “coworking in Asia, China specifically, is making coworking in the US look like it’s standing still.”
UrWork and New Space’s recent merger is proving Elam’s word right.
Technode reported that this merger is “the largest merger ever in China’s coworking field between two top players in the market.” But their plans go beyond China. They even go beyond Asia. The Technode article stated that both companies are making globalization a top priority, hoping to boost their number of locations to 150 in 35 cities in 3 years.
Many have likened UrWork to WeWork. And they have rightly done so. While WeWork has been rapidly growing across the globe, the merger between UrWork and New Space proves that WeWork is not the only one seeking the #1 position in the coworking world.
The Technode article further states that:
“The market valuation of the merged entity would hit an impressive RMB 9 billion (US$1.31 billion), the firm disclosed. Beijing-headquartered UrWork has raised to unicorn status in January this year after pocketing an RMB 400 million (US$ 58 million) worth of round, the largest capital injection in the vertical so far.”
Although their combined valuation isn’t nearly as high as that of WeWork’s, the Chinese and Asian market can potentially be larger than the North American one for coworking. And UrWork and New Space have already ‘conquered’ this market, while WeWork’s presence in it remains low.
Without a doubt WeWork is up against a worthy opponent in Asia, and UrWork and New Space are about to face a strong opponent in North America and Europe, too.
The merger is also an indicator of a maturing industry across the globe. Like many industry leaders have stated, consolidation is bound to happen in the industry, and this is a perfect example of how consolidation can be a smart, strategic move for operators that wish to remain competitive as the industry continues to grow and evolve.
Frank Cottle, CEO and Founder of the Alliance Network said, that “it’s evident that there will be a number of large successful companies; and as an industry we should pay attention to the global scene as well as our local markets.”