NEW YORK, NY, Co-working space startup WeWork has set up a Chinese unit, with the help of a $500 million investment from Hony Capital and SoftBank Group.
WeWork Cos., the company that provides the space, community and services to help people make a life, not just a living, SoftBank Group Corp. ("SoftBank") and Hony Capital, a leading private equity firm in China, today announced a new $500 million investment dedicated solely to fueling WeWork's growth and expanding its operations throughout China. The investment vehicle, led by Hony Capital and a subsidiary of SoftBank, created an entity that will operate under the name WeWork China. WeWork will be responsible for the management and operations of WeWork China, while SoftBank and Hony Capital will each own a minority stake. With the support of local teams and its partners, WeWork will continue looking for new space in cities with existing mature businesses, while also exploring new regions with potential for innovation and growth.
The investment will enable WeWork China to expand its operations into new cities next year and increase its current footprint in Beijing, Hong Kong and Shanghai on an accelerated timeframe. In the immediate term, WeWork China will continue building its local team and attracting new talent to join in its mission and help facilitate this unprecedented expansion.
"We are extremely pleased to deepen our partnerships with Hony Capital and SoftBank to bring WeWork to more locations and cities across China at an even faster pace," said Adam Neumann, Chief Executive Officer of WeWork Cos. "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 added, "With this investment and singular focus on WeWork China, we will support the growth of our members in China by creating an even stronger network across this important market. We believe that by also increasing our presence in China, we will help to attract more foreign investment and companies into China. China has become an incredible hub for business, finance, and innovation, and through this investment, we will expand beyond Beijing, Hong Kong and Shanghai. We believe WeWork can unlock numerous opportunities for businesses all over China and we will help more people create a life, not just a living."
Ronald D. Fisher, Director, Vice Chairman of SoftBank, said, "At SoftBank, we are constantly looking to invest in disruptive technologies that will prepare us for the next stage of the Information Revolution. WeWork is leveraging the latest technologies in its transformative and innovative approach to work styles, which fits squarely with that vision. We are excited to continue to support WeWork on its growth and expansion throughout Asia."
John Zhao, the Chairman and Chief Executive Officer of Hony Capital, said, "This is our second round of investment in WeWork, based on our solid confidence in WeWork's business model and development strategy. With our capital and other resources, we hope we can help accelerate WeWork's localization and expansion in China. Since its entry into China last year, WeWork has demonstrated its unique business model and clear competitive advantages, which highlight not only the shared office space model itself, but also its global network that offers interaction between members, services and various other resources. In addition to serving entrepreneurs and startups, WeWork has also created a brand new working style that has since attracted many world-renowned enterprises such as Microsoft, GE and Dell, as well as local companies including HSBC and OFO. We believe that with the unrivaled scale, global network and the vibrant community culture, WeWork will keep leading the shared-office industry in the future."
Zhao added, "We believe with Hony Capital and SoftBank's investments, WeWork will introduce its unique business model to more locations across China at an even faster pace. The innovative ecosystem it has created will continue benefiting the growth of Chinese companies, while helping to bring in foreign investments throughout the country, therefore providing better products, technology and services to Chinese consumers."
To oversee this expansion and lead the Asia region, Christian Lee will become the Managing Director of WeWork Asia and will be based in Shanghai at the Company's regional headquarters. Lee will manage all aspects of WeWork China's operations, build and scale the local team, pursue partnership and growth opportunities, and ensure the continuity of WeWork's signature culture, product and community. Lee, who has served in various senior leadership roles, joined WeWork in 2015. Lee has been instrumental in scaling and growing WeWork around the world as he helped to raise capital, structured various partnerships agreements and developed WeWork's regional infrastructure operations.
In greater China, WeWork currently operates eight locations. By the end of 2017, it is expected to have about 15,000 members in China. WeWork's ability to help its member companies can be seen all over the world, especially in China. WeWork responds to its members' evolving needs for flexible space and has created an inspiring community that can support its members' growth.
WeWork is a global company with a local playbook. It provides an entirely new way to work by offering flexible space, services, and a connected community network to creators, entrepreneurs, small and medium businesses, and multinational companies. WeWork's "space as a service" solution enables companies of all sizes to enter and exit markets opportunistically, grow and shrink office footprints according to their needs, and pursue new business lines and ideas in a way that best suits their particular needs. Today, more than 10% of Fortune 500 companies are members with WeWork. This enterprise company segment represents the fastest growing member demographic for WeWork and it now accounts for more than 20% of WeWork's total membership.
WeWork is also creating a digital operating system for physical space that leverages data and technology at each point in the building process so it can make better sourcing decisions, improve its designs, build faster and smarter, and ultimately improve the lives of the people working within its buildings. Its cutting-edge technologies and dedication to technological innovation is one of the key reasons why WeWork has been able to scale from operating one workspace location to more than 150 in just over seven years. This technology will continue to be a differentiating factor as it accelerates growth in China. WeWork expects to gain greater efficiencies in its building and operations as its presence and notoriety in China increases.
WeWork is a platform for creators, providing more than 130,000 members around the world with space, community, and services through both physical and virtual offerings. WeWork's mission is to help create a world where people work to make a life, not just a living. WeWork currently has more than 155 physical locations in 50 cities and 15 countries around the world. WeWork, started in New York City in 2010, was founded by Adam Neumann and Miguel McKelvey.
About the SoftBank Group
SoftBank is a global technology player that aspires to drive the Information Revolution. SoftBank is comprised of the holding company SoftBank Group Corp. (TYO: 9984), its domestic telecommunications subsidiary SoftBank Corp., and its global portfolio of companies, which includes advanced telecommunications, internet services, AI, smart robotics, IoT and clean energy technology providers. In September 2016, ARM Holdings plc, the world's leading semiconductor IP company, joined the SoftBank group. To learn more, please visit www.SoftBank.jp/en/
About Hony Capital
In March 2016, Hony Capital led the F round of investment in WeWork and introduced Chinese investors including Legend Holdings, Jin Jiang, Greenland and China Oceanwide. This is the second major cooperation between Hony Capital and WeWork, and Hony Capital will continue helping WeWork to bring in Chinese investors with various resources.
Hony Capital, founded in 2003 and sponsored by Legend Holdings, specializes in buyout investment and currently it has USD 10 billion assets under management. The investors of Hony Capital include Legend Holdings, Jinjiang, Oceanwide, Greenland and leading investment institutions such as Goldman Sachs, Temasek, European and U.S. pension funds and endowment funds. Hony Capital has invested in over 100 companies in the areas of pharmaceutical and healthcare, media and entertainment, consumer products, food and beverage, as well as machinery and equipment. Hony Capital's portfolio companies include China Shijiazhuang Pharmaceutical Group (CSPC), Zoomlion, China International Marine Containers (CIMC), Suning, Shanghai Chengtou Hoding, Jin Jiang International Hotels, ENN, PizzaExpress (UK), STX(US), WeWork (US), etc. The assets value of these companies totals about RMB 2.9 trillion with sales volume of RMB 860 billion, providing more than 450,000 jobs.
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