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- Ucommune, WeWork’s largest China rival, is reportedly seeking a $3 billion valuation for a Nasdaq IPO.
- In November last year, Ucommune raised $200 million at a $2.6 million valuation in a Series D funding round.
- Ucommune currently operates locations across 37 cities and it aims to grow to over 350 cities within the next three years.
Chinese coworking giant, Ucommune, is reportedly seeking a $3 billion valuation for its initial public offering (IPO) on Nasdaq. According to The Information, Ucommune hired Citigroup and JPMorgan Chase to work on an IPO in Nasdaq as early as the third quarter of this year.
Last year, Ucommune strengthened its presence in China and Asia through various acquisitions, including coworking rivals Woo Space, Wedo, Workindgom, and Fountown. In November 2018, the company raised $200 million in a Series D funding round, at a $2.6 million valuation, to power its international expansion.
According to The Information, “Ucommune’s IPO discussions come at a challenging time for China’s real estate sector. While the supply of office buildings for rental startups has increased in the past few years, China’s slowing economy is now threatening to weaken demand, while some coworking spaces have closed down amid high vacancy rates.”
Ucommune’s largest rival, WeWork, is also reportedly considering an IPO this year. Reports from January this year claim that WeWork’s parent company, We Company, is considering an IPO “much sooner than expected”. The news came shortly after WeWork’s largest backer, SoftBank Group, slashed its investment from $16 billion to $2 billion. Should WeWork seek an IPO, it would be at a valuation 15 times higher than Ucommune’s ($47 billion).
Suggested reading: “Is WeWork Overvalued? Key SoftBank Investors Think So”
Both coworking companies have been growing at an incredible rate over the past couple of years. Founded in 2015, Ucommune has grown to over 200 locations across 37 cities and it has plans to grow to 350 cities in 40 countries over the course of the next three years. WeWork, which was founded in 2010, currently operates 562 locations across 97 cities.
Both WeWork and Ucommune rely heavily on cash to power their international expansion. An IPO could provide them with access to additional funds, however, they will also have to justify their soaring valuations, which could be particularly challenging for WeWork.
