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WeWork Won’tWork in China, at least not as majority owner
Local partner splashes $200m to take control
Office-as-a-service outfit WeWork has effectively left China, at least as an active player.
The company on Thursday announced that one of its investors, Trustbridge Partners, had sent $200m its way to take a stake in WeWork China.
That stake will leave WeWork as a minority shareholder in its Chinese operations, effectively ending its active participation in the market.
Trustbridge operating partner Michael Jiang has been appointed as the acting CEO of WeWork China.
Trustbridge managing partner Feng Ge said, in a canned statement, that the firm is “confident of the growing demand for space-as-a-service as companies in Greater China continue to grow and maximize the unprecedented growth opportunities ahead.”
WeWork CEO Sandeep Mathrani also thinks there’s lots of upside for his company, saying “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.”
He therefore declared “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.”
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Why isn’t WeWork writing that chapter itself?
There’s no hint of geopolitical shenanigans behind the move – the nature of WeWork’s business means it is not directly impacted by US export bans.
More likely is that WeWork is still struggling to come up with the cash to keep itself operating after its cancelled share market debut, swingeing job cuts and offload of assets including professional networking service Meetup (reportedly for much less than the $156m it paid).
Mathrani doubtless hopes WeWork can now sip some sweet profits flowing out of China without all the hassle of running the business there. ®