The world's largest co-working service provider WeWork announced a merger with China-born Naked Hub on Thursday, marking the New York-based industry leader's second major investment in a co-working company in nine months.
WeWork acquired the Singaporean co-working company SpaceMob in August. It was included in WeWork's $500 milion expansion plan for Southeast Asia and South Korea announced last year.
Adam Neumann, chief executive officer of WeWork, confirmed the merger in a news conference held Thursday in Shanghai, when the company's Creator Award event advocating entrepreneurship was also held in the city. The deal will be carried out in the form of equity investment.
Details of the merger such as the exact amount and the operation of Naked Hub as an independent brand are not disclosed. A Bloomberg report estimated that the transaction will be around 400 million U.S. dollars.
Neumann said that WeWork and Naked Hub share a similar understanding in the importance of space, community, design, culture and technology. The partnership will help their businesses across China “grow, scale and succeed”.
Jonathan Seliger, CEO of Naked Hub, said that the partnership will enable the teams to move faster and grow bigger to provide the most innovative and relevant co-working operation in Asia and the world.
Founded in 2015 by the Shanghai-based luxury resorts company Naked Retreat, Naked Hub now provides 24 workplaces globally to 10,000 members ranging from independent workers to small- and medium-sized enterprises to multinational companies.
WeWork opened its first location in Shanghai in 2016. Up till now, it has 10,000 members across 13 offices in Shanghai, Beijing and Hong Kong. By the end of this year, WeWork will have more than 40,000 members across 40 cities in China. The number of members in China will reach 1 million by the end of 2021.
A consortium led by Beijing-based Hony Capital and Legend Holdings invested 430 million U.S. dollars in series F financing of WeWork in March 2016. John Zhao, chairman and CEO of Hony Capital, said that the Chinese market is big enough for industry leading co-working service providers and smaller players to thrive.