Less than two weeks ago, WeWork took the wraps off a new massive round of funding — $500 million from the Chinese private equity firm Hony Capital, the Japanese internet giant SoftBank, Greenland Holdings, and China Oceanwide.
Now, the company is announcing that it’s pouring that exact amount — $500 million — into expanding into Southeast Asia and Korea.
As part of that effort, it has also spent an undisclosed amount to acquire a 1.5-year-old, Singapore-based co-working company Spacemob. Spacemob’s founder and CEO, Turochas Fuad will become managing director of Southeast Asia for WeWork. His roughly 20 employees will also join WeWork.
It’s interesting that WeWork is making a bit of a to-do about the initiative. Certainly, outsiders might have assumed the company’s newest funding would be used to push more aggressively into these news markets.
Meanwhile, SpaceMob had raised just $5.5 million in seed funding from Alpha JWC Ventures and Vertex Ventures in November of last year. Rather than a big, splashy acquisition, it more or less represents the same scale of business that WeWork has acquired in the past. (Its few previous acquisitions to date include Fieldlens, a 5.5-year-old mobile communication system for the construction industry that it bought in June; Welkio, a digital sign-in system for guests at an office that WeWork purchased last year; and Case, a building information modeling and consultancy firm that WeWork acquired in 2015. The company hasn’t disclosed terms for any of these deals.)
Given the fractured but growing competition WeWork is facing in these newer markets, one can hardly blame it for stating its intentions so explicitly. Just last month, URWork, a two-year-old, Beijing-based co-working business in China modeled largely WeWork, raised $30 million in fresh funding that brings its total funding to date to $175 million altogether.
WeWork already has locations in Beijing, Shanghai, Hong Kong, Seoul, and Bangalore. Zeroing in on Singapore also makes sense, as local press has noted in the past, given the sky-high rates that startups must pay for office rates, which rank among the highest in the world.
The company’s $500 million is just the latest of three significant rounds it has raised so far in 2017. In June, a Delaware filing surfaced that showed WeWork had closed on $760 million in new funding in June. WeWork had also raised $300 million in March.
The company is now valued at $20 billion.
In addition to SoftBank, Hony Capital, Greenland Holdings, and China Oceanwide, WeWork’s investors include Benchmark, Aleph, Fidelity Investments, Goldman Sachs, JP Morgan Chase, Legend Holdings, T. Rowe Price, and Wellington Management, among others.