WeWork has raised $500 million USD from SoftBank Corp. and Hony Capital, Inc. The new capital will be used to expand WeWork’s presence throughout China.
WeWork provides business space and services to clients in Beijing, Hong Kong and Shanghai. The company will use this latest investment to increase its presence in those three cities as well as to expand to new cities in China on an accelerated timeframe.
The company now has eight locations across China and expects to have 15,000 members by the end of this year. WeWork plans to continue building a local team in China, recruiting new talent to meet expansion goals throughout the country.
The investment from Hony Capital and SoftBank will be used to create a business entity that operates under the name WeWork China. SoftBank and Hony will each own a minority stake in the new company, which will operate as a subsidiary of WeWork Cos.
Adam Neumann, CEO of WeWork, said that by partnering with Hony and SoftBank his company will be able to expand at an even faster pace. “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.”
Neumann also believes that WeWork can be beneficial not only in the flexible space and business services that it provides, but also that by increasing the company’s presence in China, “we will help to attract more foreign investment and companies into China.”
WeWork offers flexible space and business services to independent creators, entrepreneurs and SMEs, but also counts multinational corporations as the fastest-growing member demographic for the company. Currently, 10% of Fortune 500 companies are members with WeWork, accounting for over 20% of the company’s total membership.
Earlier this month, WeWork’s announcement that it was moving into Japan was followed by an announcement that rival NakedHub would merge with JustCo., emerging as WeWork’s main competitor in the Asia Pacific market. While WeWork has a much larger global footprint than NakedHub, analysts believe that the smaller company could be a significant competitor for WeWork as a recognized local brand.