Page 21 - Forbes - Asia (September 2018)
P. 21
On Asia: “This is a market
we must take,” says founder
Liu Chengcheng.
people with knowledge of the matter. Early talks of an IPO in by the end of the year.
the U.S. have also been taking place. A Kr Space spokesman Talks between Adam Neumann, WeWork’s billionaire
declined to comment on the funding but says there are no cofounder, and Liu in Beijing fell apart because they couldn’t
IPO plans yet. (Liu won’t say what stake he is retaining.) agree on who would have control of the combined entity,
Also very much in the hunt is China’s Ucommune, led by according to one knowledgeable party. A WeWork spokes-
Mao Daqing, a former executive of real estate giant Vanke. woman declined to say whether Neumann had met with Liu.
It was valued at $1.6 billion ater merging with local rival he Chinese market, according to Beijing consultancy
Wujie Space in March. iResearch, reached 5.5 billion yuan and should nearly double
he domestic challenges are also better at controlling by 2019. It beneits from government policies that encour-
costs, according to Jeacy Yan, a partner at investment irm age startup businesses to spur domestic innovation.
IDG Capital. “Oice sharing is a very localized business Like WeWork, which last year reported a loss of $933 mil-
where you have to focus closely on operations,” Yan says. lion on revenues of $886 million, the unicorns Kr Space and
“Local companies have a much bigger chance of becoming Ucommune are well short of proitability. hey plan ulti-
the winner.” mately to monetize advertising and premium services, which
Ken Xu, a partner at investment irm Gobi Partners and can be more lucrative than leasing seats, says iResearch
an investor in Kr, points to Liu himself as one of the key fac- analyst Yu Kexin.
tors in the company’s growth. His experience running 36 Kr For his part, Liu doesn’t see making money as a priority
has enabled him to build a network among local entrepre- because Kr Space is currently focused on expansion. And
neurs and better understand their needs. he is already looking beyond mainland China: In May, Kr
WeWork, meanwhile, still leads in brand awareness, and Space entered Hong Kong, leasing seven oors at the One
domestic irms are working to catch up, according to IDG’s Hennessy building in Wan Chai. It’s also expanding into
Yan. he company recently clinched a separate $500 million Bangkok, Seoul, Singapore and Tokyo, with the goal of catch-
funding for its China-focused subsidiary from investors ing up with WeWork in terms of total oice space managed
that included Singapore’s Temasek. WeWork acquired by 2021.
Chinese rival Naked Hub for $400 million in April, and it “WeWork is just entering Asia, so we are at the same page
plans to expand to 40 locations and attract 40,000 members here,” he says. “his is a market we must take.” F
SEPTEMBER 2018 FORBES ASIA | 19
