Co-working in China in going public

Flats are small in China’s big cities. No wonder ambitious entrepreneurs there like the wide-open vibe of co-working spaces. Ucommune, the biggest rival to WeWork in China, plans to raise up to $200 million in a US initial public offering next year. The Beijing-based office specialist has some big investors including Sequoia Capital and Ant Financial. Unlike SoftBank-backed WeWork, Ucommune should get a more grounded market valuation. Ucommune does share traits with its rival. Both lease buildings long-term, then sub-let space in them short-term to companies, often start-ups. Both have grown in Asia through acquisitions… But the similarities end there. Ucommune’s edge in China comes from its ties to property developers… These relationships should mean more flexibility and negotiating power for its tenancies. The company claims 80 per cent of the its offices do make money. Revenue more than doubled last year… Ucommune has a smaller portfolio… WeWork has about a quarter more space but generates losses. Then again, on its most recent private market valuation of $3 billion for Ucommune looks more of a real estate company rather than a frothy tech group like WeWork at $47 billion… For those keen on the Chinese co-working market, Ucommune may well appeal. If it has the modernity of WeWork at a fraction of the price, so much the better.