Why is WeWork 2.0 trying to go public?
0Reported today on TechCrunch
For the full article visit: https://techcrunch.com/2019/12/17/why-is-wework-2-0-trying-to-go-public/
Why is WeWork 2.0 trying to go public?
In the wake of WeWork's embarrassing IPO rout, you might imagine that startups working in similar markets would cool it for a bit. Perhaps they could work on cutting spending, improving their gross margins, and, say, shooting for profitability.
Not so, at least in one case. Instead of doing those things, China-based Ucommune filed to go public in America this month. The WeWork competitor is mostly a co-working business. It's also a marketing company. And it has some of the worst economics we've seen in a company since WeWork.
Why this company is trying to go public isn't hard to understand. It needs the cash. But at the same time, the chance of it debuting at a price it likes seems slim, given the market's recent history - as well as Ucommune's own.
Introductions
Before we chat about the business fundamentals of Ucommune, a primer on the company itself.
Founded in 2015, according to Crunchbase data, Ucommune has raised over hundreds of millions. In 2018 alone the company raised a venture round and its Series C and its Series D. Prior investors include Gopher Asset Management, Aikang Group, Tianhong Asset Management, All-Stars Investment and Longxi Real Estate.
TechCrunch reported that its final private round valued Ucommune at $3 billion.
All that capital was put to work. According to is F-1 filing, Ucommune operates 197 co-working facilities in 42 cities. The company also claims more than 600,000 members and nearly 73,000 workstations.
The WeWork similarities continue: While discussing itself in its IPO filing, the firm touts an "asset-light model," which it claims helps property owners "benefit from our professional capabilities and strong brand recognition" as well as allowing its "business to s