WeWork sells majority stake in China business

NEW YORK • WeWork is selling a majority stake in its China business as the co-working giant continues to pare down its expenses, the company said on Wednesday.

Trustbridge Partners, an existing investor in WeWork's China subsidiary, has invested an additional US$200 million (S$275.3 million) and now owns more than half of the business, WeWork said.

WeWork parent company We Co is giving up operating control of the unit, but will continue to receive an annual service fee in exchange for the use of the WeWork brand and services, it added.

WeWork opened its first Chinese location in Shanghai in 2016, and now operates more than 100 locations in 12 cities.

Trustbridge operating partner Michael Jiang has been appointed the acting chief executive of WeWork China, the company said.

For years, WeWork had eyed Asia as a source of significant growth.

The company had created joint ventures to grow its business in Japan, South Korea and China, and the China arm had raised US$1 billion directly from investors such as SoftBank Group, Hony Capital and Temasek.

WeWork also sued a Chinese rival, UrWork, over a too-similar name, and spent hundreds of millions acquiring other regional co-working companies such as Naked Hub in China and Spacemob in Singapore.

But, after WeWork's failed attempt at an initial public offering a year ago, the New York-based company has sought ways to cut expenses and pare back ventures outside of its core business in the United States.

That included selling off many of its acquisitions and shutting down projects such as WeGrow, a private elementary school.

The company has also tried franchise-like business agreements in the past, particularly for its locations in India.

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A version of this article appeared in the print edition of The Straits Times on September 25, 2020, with the headline WeWork sells majority stake in China business. Subscribe