China’s largest coworking provider Ucommune has officially gone public, but not with the IPO it has been planning for the past few years. Instead, the company has merged with NASDAQ-listed Orisun Acquisition Corp. in a deal that values the newly combined companies at $769 million, a dip from the $3 billion the Beijing company received two years ago.
The deal involves Orisun’s unit Ucommune International to purchase Ucommune, allowing the subsidiary to be a listed company on NASDAQ.
This news follows Ucommune’s failure to get its IPO off the ground with Citigroup and Credit Suisse last December after the organizations saw the coworking firm’s valuation to be unrealistic.
“Ucommune seems determined to be a public company, despite Wall Street’s less than enthusiastic response,” said Brock Silvers, chief investment officer of Adamas Asset Management. “Early investors must be fiercely pressuring founder Mao Daqing, who now seems to be undertaking a reverse merger process at a reported 75 percent discount to the company’s $3 billion valuation in 2018’s Series D fundraising.”
Despite the company’s valuation peaking at $3 billion in November 2018 after raising $200 million in a series D funding round, the industry as a whole has experienced trouble since then with the economic downturn caused by the pandemic. However, Ucommune is confident it will double its revenue to $301 million by 2022.