|WeWork, a New York-headquartered shared workspace company, is looking at expansion in Southeast Asia over the next year through potential joint venture (JV) partnerships and future acquisitions, said Managing Director for Southeast Asia Turochas Fuad and Managing Director for Asia Christian Lee.
Lee said WeWork is currently looking at a few markets in Southeast Asia, but did not disclose specific countries.
Fuad added the pipeline for 2018 has WeWork entering more Southeast Asian markets as a focus over the coming year.
The company will consider JV and further acquisitions in the region with partners that can bring local operations and employees, he said, highlighting knowledge and network in a community is key.
Lee cited the USD 500m minority investment lead by SoftBank [TYO: 9984] and Chinese private equity firm Hony Capital to form a JV under the name WeWork China for the purpose of expanding in the Chinese market as an example.
WeWork acquired Singapore-based coworking company Spacemob in August 2017 for an undisclosed sum to create a hub for its expansion in Southeast Asia, Fuad said, adding that they saw Singapore as the “gateway” to the rest of the region.
A press release from WeWork on the acquisition said that Spacemob had plans of opening new locations in Vietnam and Indonesia, but the executives did not confirm if this was still an interest.
Fuad, ex-CEO and founder of Spacemob, said the acquisition that led him to join WeWork was based on a locally focused expansion strategy.
Lee added the focus of locating the right local team and partners is key to making the company’s global platform work and that Fuad will lead efforts for locating these opportunities in Southeast Asia.
WeWork is aiming to open two new locations in Singapore to add to its current single location, Fuad said. The first is slated to open in early 2018 and the next due to be completed in early 2019.
WeWork is looking to expand its enterprise “space as a service” solution in Southeast Asia to allow businesses to enter and exit markets opportunistically.
This enterprise company segment represents the fastest growing segment and it now accounts for more than 20% of WeWork’s total membership, Fuad said.
The enterprise solution called “Powered by We” allows companies to find, design, build, and operate their real estate portfolio on the back of WeWork’s software, hardware, and supply chain infrastructure, he said.
TechCrunch named China’s Naked Hub, which acquired Singapore’s JustCo in July, as WeWork’s closest competitor in Asia.
Australian Servcorp [ASX:SRV] and Luxembourg-headquartered Regus [LON:IWG] operate in the same ecosystem as WeWork but do not possess the same community focus or the scale to operate a complete global supply chain, according to Lee.
“We have opened 32 locations in 20 cities adding 20,000 desk spaces all on the same day before,” he pointed out while referring to their capacity.
WeWork announced in a November 2017 press release it raised USD 4.4bn in investment from SoftBank and the SoftBank Vision Fund. The company has raised a total of USD 9.85bn in funding, according to Crunchbase.
A recently released statement from the company this week cited five acquisitions made this year, including Fieldlens, Unomy, The Flatiron School, Meetup, and the previously mentioned Spacemob. The release also cited new partnerships with Samsung [KRX:005930], RBC [TSE:RY], Mastercard [NYSE:MA], and Amazon [NASDAQ:AMZN].
by Kainoa Blaisdell in Singapore