Update: The sale has been confirmed, but the specifics have not been released.

WeWork will acquire Naked Hub for $400 million, according to a source close to the deal, local media is reporting. The acquisition will be in settled in the combination of cash and equity. It is said that more details will follow as the two companies’ make their official announcement tomorrow. TechNode has reached out to WeWork and Naked Hub for comment but did not receive a reply before publishing.

The New York-based WeWork entered China and launched its first location in Asia back in 2016. The acquisition of naked Hub would be WeWork’s first major move in China, which shows the company’s ambition to dominate China’s booming and increasingly competitive co-working market.

Founded in 2015, the Shanghai-based naked Hub has opened 20 co-working spaces in Shanghai and Beijing, and 46 locations throughout Asia. In January, naked Hub acquired a 70% stake in Gravity, a co-working space in Australia, as part of a grand plan to open more than 200 locations across five Asian countries by 2020.

What went wrong?

According to local media reports, naked Hub’s operation didn’t go well last year. And on top of talent loss, the company announced a series C round of fundraising for at least $125 million this January but has yet to receive the funds. On top of that, their announced merger with JustCo appears to have fallen through.

In China, the co-working market is entering a mature stage. Local players like naked Hub and UCOMMUNE, China’s largest co-working space, go head-to-head in the crowded space. The expansion of global players like WeWork is only adding fuel to the fire.

Nicole Jao is a reporter based in Beijing. She’s passionate about emerging trends, news, and stories of human interest within the world of technology. Connect with her on Twitter or via email: nicole.jao.iting@gmail.com.

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