Ucommune, a Coworking Space Provider, Files for $100 Million IPO

The company with global ambitions aims to trade its shares on the New York Stock Exchange under the ticker symbol "UK."

CapitalWatch Staff
    Dec 12, 2019 3:00 PM  PT
Ucommune, a Coworking Space Provider, Files for $100 Million IPO
author: CapitalWatch Staff   

Ucommune Group Holdings Ltd., a Beijing-based coworking space provider, has filed for an initial public offering in New York of up to $100 million.

Ucommune positions itself as a company with global ambitions. From the launch of its first coworking office space four years ago, it came to operate 197 community workspaces in 41 cities in China, as well as one office space in Singapore, according to the prospectus filed on Wednesday with the U.S. Securities and Exchange Commission. In addition, the company said it holds a minority interest in seven associate coworking space providers.

That makes Ucommune the largest coworking space provider in China, as supported by data from independent market analysis firm Frost & Sullivan, cited in the filing. It has presence in all the cities in tiers one and two in China and offers "flexible and cost-efficient office space solutions" aimed at expansion and productivity, Ucommune said. 

The profitability of a coworking space depends on its maturity, with spaces operated for two years considered as having stable occupancy, according to the filing.

Ucommune wrote, "As we continue to pursue rapid growth, we continue to operate in a state where the majority of our spaces are non-mature and have not reached stable cash flow. As of September 30, 2019, only approximately 38% of our spaces in operation were mature, with the remaining 62% of our spaces in operation having been open for 24 months or less."

The company also operates a platform connecting offline and online services, offering a smart office system, IoT solutions and data management system. As of September 30, the platform had 609,600 members, including 25,000 enterprises, Ucommune said.

For the nine months through September, Ucommune reported revenue of $122.4 million, up 210% year-over-year. Losses in the period attributable to the company has more than doubled from a year ago to $77.5 million, according to the report. For 2018, the company stated revenue of $62.7 million on losses of $60.1 million.

Ucommune said it intends to use the proceeds of its offering in New York to expand its spaces and service offerings, to strengthen its technology and for working capital, as well as other general purposes.

Haitong International Securities Co. Ltd. and China Renaissance Securities (Hong Kong) Ltd. are acting as the representatives of the underwriters, which also include The Core Securities Co. Ltd., Prime Number Capital LLC and CRIC Securities Co. Ltd.

The company was established by Chinese real estate mogul Daqing Mao. He is the grandson of Mao Ziyao, the architect who helped design Beijing's Great Hall of the People. 

Ucommune has applied to trade its shares on the New York Stock Exchange under the ticker symbol "UK."

The company reportedly targeted to raise up to $200 million, according to public media reports in July. Bloomberg has called Ucommune a "loss-making Chinese startup" that will rival America's WeWork companies globally. The exact terms of the offering have yet to be determined.