WeWork Sells Majority Of Its China’s Division Unit Stake To Trustbridge Partners

Softbank backed American co-working giant WeWork is selling its most of its stake in China market to its one of the early investors, Trustbridge Partners. In the press release, the company announced that it has secured a USD 200 Million investment from the afore-mentioned private equity firm.

WeWork expanded to China in 2016 and since then, it has hastily grown to more than 100 locations, across 12 cities. The company said that it still holds a minority stake in China’s operations and will receive an annual fee from its Chinese division due to the usage of the brand name. As of 2020, WeWork has around 843 locations in 150 cities and 38 countries across the globe.

WeWork’s CEO Statement On The Latest Investment

“WeWork China has built a business that has cemented WeWork’s position across the region as the market leader in flexible space,” said Sandeep Mathrani, CEO of WeWork. “The value proposition and long-term potential for WeWork is increasingly clear as the demand for flexibility at scale comes to the forefront of businesses around the world. This investment is a testament to our business and in Trustbridge we have truly found the best local partner for WeWork China’s next chapter.”

The company claims to have around 65,000 members in China. In 2019, WeWork launched an on-demand service in the name of “WeWork Go” which allows its China-based consumers to pay in accordance with the time spent in the working space. This is beneficial for consumers who don’t want to commit themselves to long-time leases.

WeWork China is not only facing problems such as low-occupancy rates in the country but the COVID-19 pandemic has hampered its operations in a hard way. Now, it has sold its operations to Trustbridge Partners who will be seeking partnerships with real estate firms, local communities, and many more. Michael Jiang, who’s an operating partner at the equity firm, has been appointed as the new boss of the unit. Earlier, he was the senior vice president at Meituan, a Chinese delivery platform.

Trustbridge Partners Take On The Investment

“WeWork China has built a business that has cemented WeWork’s position across the region as the market leader in flexible space,” said Sandeep Mathrani, CEO of WeWork. “The value proposition and long-term potential for WeWork is increasingly clear as the demand for flexibility at scale comes to the forefront of businesses around the world. This investment is a testament to our business and in Trustbridge we have truly found the best local partner for WeWork China’s next chapter.”

Singapore-based investor Temasek Holdings and Trustbridge Partners were in talks with WeWork China’s unit to increase their stake in China’s division, Reuters reported, citing the people familiar with the matter. In July 2018, both the investors including Chinese fund Honey Capital had raised around USD 500 Million, valuing the firm at approximately USD 5 Billion.

Following WeWork’s failed IPO and ousting the founder Adam Neumann, SoftBank invested around USD 9.5 Billion to restructure the whole company. The Japanese conglomerate founder Masayoshi Son said he was “foolish” for his investment in the company. SoftBank gave WeWork a valuation of USD 2.9 Billion which was USD 47 Billion in 2019.