Chinese Co-working Giant Ucommune Files For US IPO

Mao Daqing, founder of Ucommune. (Image credit: Ucommune)

This article by Emma Lee originally appeared on TechNode, the leading English authority on technology in China.

Ucommune, China’s largest co-working space operator, filed with the US securities regulator on Wednesday for a listing on the New York Stock Exchange.

Why it matters: Ucommune’s filing follows months after US-based WeWork’s failed plans for an initial public offering (IPO) triggered widespread investor concern over profitability prospects of the co-working model.

  • With the lion’s share of its operations in China, Ucommune faces competition from WeWork, which has expanded aggressively since first entering the market in 2017.
  • Local players like Kr Space and MyDreamPlus add to the crowded playing field in China’s co-working industry.

Details: Haitong International and China Renaissance are lead underwriters for the IPO, but the preliminary filing did not offer details on the size of the offering.

  • The company plans to list under the ticker symbol “UK.”
  • Ucommune runs 197 spaces across 42 cities in greater China—which includes Hong Kong—and Singapore as of September 2019, according to its prospectus. In contrast, WeWork operates 120 spaces across 12 cities in greater China, around 15% of its global total.
  • Ucommune said it has 584,600 individual members and 25,000 business members as of September this year.
  • In addition to its “self-operated” model where the firm serves as a secondary landlord, Ucommune also runs an asset-light model, including space design, building, and management services.
  • The asset-light business operates 39 spaces, and the unit has turned an operating profit in both 2018 and the nine months ended September 2019, according to Ucommune.
  • Revenue rose 209.9% to RMB 874.6 million ($122.4 million) for the nine months ended September 2019 from RMB 282.2 million the same period a year earlier.
  • The company’s net loss reached RMB 573 million (around $80 million) in the first nine months of this year, up from RMB 445 million in 2018 and RMB 373 million in 2017.
  • To compare, WeWork generated a $900 million net loss in the six months ended June 30, on revenue of $1.54 billion earned during the same period.
  • Ucommune is an investor in TechNode.

Context: Riding high on China’s shared space boom, Ucommune has been an investor darling since its inception. The firm has closed a total of 11 funding rounds, raising a combined $704.4 million investment, according to startup database Crunchbase.

  • Founded in 2015 by Chinese real estate veteran Mao Daqing, Ucommune fared well during widespread market consolidation in China’s co-working space which began in 2017.
  • The firm acquired a group of smaller co-working spaces in 2018 including Fountown, Wedo, Woo Space, New Space, and Workingdom.
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