WeWork to expand China presence with naked HUB takeover

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Global co-working giant WeWork is set to buy out Chinese rival naked HUB in what would be a landmark deal in one of the world’s biggest markets for shared workspaces.

According to Bloomberg, WeWork will fork out 400 million US dollars to acquire a majority stake in the company, which was set up in 2015 in Shanghai.

With 46 locations in China and Vietnam, naked HUB has seen rapid growth during a period of intense competition for the co-working sector, with WeWork and fellow Chinese rival UrWork all looking to claim the upper hand in China and Southeast Asia.

A building used by naked HUB in Shanghai, January 2018. /VCG Photo

WeWork, which had at least 171 shared workspaces around the world by the end of last year, announced earlier this year that it would push into the Chinese market with plans for new locations in eight first and second-tier cities. The company already has 16 spaces in Beijing, Shanghai and Hong Kong.

A takeover of naked HUB would put WeWork in a much stronger position to take on UrWork, arguably its biggest rival in China. UrWork has been valued at around 1.5 billion US dollars, after setting up co-working spaces in more than 30 first, second and third-tier cities.

Backed by Alibaba Group and Sequoia Capital, UrWork is reportedly looking to move into 35 global cities in the next three years, and has allotted 500 million US dollars worth of funding for the Southeast Asian market, investing three million US dollars in Indonesia.

WeWork and UrWork clashed in 2017, with the US company claiming its Chinese rival’s name and brand were too similar to WeWork. The case went to court, with judges ruling UrWork would have to operate under another name in the US.

A WeWork shared office space in Shanghai, March 2018 /VCG Photo

China’s startup boom, sky-high office rents and the sheer size of the urban white-collar population in first and second-tier cities have all been major factors in the rapid growth of co-working in the country.

However, Technode reported in December that authorities in Beijing were looking to better regulate the co-working industry by banning companies from registering “virtual” business addresses at shared office spaces.

Several districts of the capital stopped granting licenses to businesses registered at co-working spaces, citing discrepancies in registered and working addresses, as well as concerns over tax issues.