Coworking giant WeWork has its eyes set on a big Chinese expansion with the help of a $500 million investment from Hony Capital and SoftBank.
With the additional funds, WeWork plans to launch a separate Chinese business, allowing the company to accelerate its expansion in China. WeWork currently has offices in Shanghai, Beijing, and Hong Kong and plans to move into at least five new big cities across China in the next twelve months. They expect 10,000 members in China by the end of this year. WeWork CEO Adam Neumann told the Financial Times that China is adopting the coworking model faster “than a lot of other places,” explaining the company’s decision to build a Chinese unit.
WeWork has used this latest tranche of funding to create a dedicated Chinese business, operating as WeWork China. WeWork will be responsible for its Chinese arm’s management and operations, while SoftBank and Hony Capital will own a minority stake.
WeWork launched in China last year, and already has eight offices in the country. By the end of 2017, the company plans to have 15,000 desks across all its Chinese co-working spaces.
Adam Neumann, chief executive officer of WeWork, said in a statement: “Since coming to China only a year ago, we’ve been able to establish a vibrant community of creators and companies – and we’ve only just begun. With Hony Capital and SoftBank’s financial support and deep expertise in the region, we’ll substantially grow our membership base in China and make WeWork the preeminent workspace solution and community in greater China.”
WeWork’s chief financial officer, Christian Lee, will become managing director of WeWork China and will run the business from Shanghai at its regional headquarters.
In an interview with Reuters, Neumann explained that WeWork China would allow for local management, as well as giving local equity and local incentives, to create a company that operates under local law and respects “all the different cultures and the different rules that exist.”
WeWork has plans to expand in other parts of Asia, starting with a Tokyo office due to open in 2018 and India to follow. It currently has 155 office spaces in 50 cities across 15 countries and is reportedly on track to bring in $1 billion in revenue this year.
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