Consolidation in China’s shared space industry continues as Chinese co-working unicorn UrWork today announced its strategic joint venture partnership with its Shanghai rival Fountown to extend their footprint into Asia and to reinforce community support.
The partnership between the two companies takes the form of an equity-swap, which will see both parties co-operating with each other on locations, membership system, vertical integration of resources across the value chain, as well as the export of technology, management, and expertise, according to a company statement. The announcement did not specify details of the deal.
Fountown, founded on 20 April 2015, is one of the top players in China’s shared space vertical with operations in 25 locations, supplying 20,000 workstations in Shanghai, Beijing, and Chengdu. The current partnership would effectively combine the strength between Fountown and UrWork, which now operates 100 locations in 30 cities in China with total aggregated space of 300,000 sq.m.
China’s co-working industry is developing at an exponential rate and the partnership is largely motivated by better service, a network of scale and enhanced competitiveness. “It’s a win-win partnership that will coerce the industry to strive for high operational standards, prevent malicious competition and tap the shared strengths of Fountown and UrWork to improve the overall operational effectiveness and standard,” said Mao Daqing, founder and CEO of UrWork.
This is not the first time for UrWork to strike a cooperation deal with a competitor. The firm merged with rival New Space in May. New Space itself merged with AA Accelerator back in 2015. The same principle guides URwork’s globalization strategy: In August, it formed a JV partnership with Serendipity Labs Coworking as the first step of the US roll-out and made a strategic investment in Indonesia’s leading co-working space provider Rework to strengthen their SEA network.