Co-working giant WeWork is buying Chinese co-working startup naked Hub, one of its main competitors in China, as part of its aggressive growth in the world's most populous country.
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Chinese media reported the deal earlier this week, and WeWork CEO Adam Neumann confirmed it in a blog post on Thursday.
We are joining forces with naked Hub, which is part of naked Group, a leading hospitality, design, technology, and lifestyle brand that was founded in China in 2007 and has hosted over 1 million guests from China and around the world," Neumann wrote.
Neumann did not confirm the price, but Bloomberg reported that the total is about $400M, citing anonymous sources familiar with the deal. Most of the payment will be in the form of equity in WeWork, most recently valued at $21B.
Naked Hub was started in 2015 by Grant Horsfield and Delphine Yip-Horsfield. Most of its operations are in China, particularly in Beijing and Shanghai, but the company has also expanded into Australia, Hong Kong and Vietnam. It claims to have 10,000 members across its 24 office locations.
WeWork already has a presence in China, launching in 2016 in Shanghai. Now the company has 13 locations in the country, and says it will increase the number to more than 40 by the end of this year.
WeWork plans to add locations in Shenzhen, Suzhou, Hangzhou, Chengdu, Nanjing and Wuhan, and expand membership in China from 10,000 to 40,000 by the end of 2018.
Naked Hub is not WeWork's only competitor in the Middle Kingdom. WeWork butted heads recently with another, Unicorn Ucommune, which was originally called URwork until WeWork sued the company for trademark infringement. Another Chinese competitor is Beijing-based Kr Space, which is backed by IDG Capital.
Last year, WeWork raised $4.4B from SoftBank for its global operations. The company then acquired another Asian competitor, SpaceMob. At the time, SpaceMob was a startup, just over a year old, and based in Singapore. The acquisitions and co-working growth are an increasingly small piece of WeWork's grand plans to grow into every aspect of modern life.
