UrWork, the unicorn that is competing with WeWork in China, is following its American rival’s lead by extending its reach in Southeast Asia after it took part in a $3 million funding round for Indonesia-based ReWork.
The round, which is described as pre-Series A, was led by China-U.S. firm ATM Capital and Indonesia’s Convergence Ventures. UrWork was a participant alongside U.S. firm Social Capital (which is increasingly active at Indonesia), Fortune Union Investments, ACE Capital and other undisclosed backers.
UrWork is valued at $1.5 billion following recent financing. It has 88 locations in 22 cities in its native China, but it is planning an aggressive overseas expansion into 32 cities worldwide over the next three years. That’s just as WeWork doubles down on China, where it recently launched a local business that is aimed at rapidly growing the eight spaces it currently operates across the Greater China region.
Just as we have witnessed Chinese tech firms moving rapidly into Southeast Asia to grab a slice of the fast-growing startup ecosystem, so the co-working unicorns have taken aim at the region, and Indonesia — its largest economy — in particular.
WeWork expanded into Southeast Asia via the acquisition of Singapore-based SpaceMob, and it has set aside a budget of $500 million to grow in Southeast Asia, which houses over 600 million people.
Already, UrWork has a location in Southeast Asia via Singapore in addition to a presence in the U.S., but now it is looking to expand into Indonesia, the world’s fourth most populous country, through this deal.
“Southeast Asia’s economy and technology market are extremely promising with huge growth potential for both local ventures and for China based businesses. We see it as a very strategic destination and are working with Rework to further open up the market and support local and overseas companies grow through the development of collaborative work spaces,” Mao Da Qing, who is CEO and founder URWork, told TechCrunch in a statement.
ReWork founder and CEO Vanessa Hendriadi told TechCrunch that UrWork’s strategic investment will give leverage for future alliances with clients and retail estate partners. While of course UrWork will help with its experience and know-how.
“UrWork was very impressed with the ecosystem, the companies they met and the country in general” after first visiting Indonesia last year, Hendriadi said in an interview. “The deal is very timely, they’d just finished their funding round, became a unicorn, opened up in Singapore and are keen to expand in Southeast Asia.”
Unlike WeWork-Spacemob, there’s been no talk of an outright buy-out of ReWork, according to Hendriadi.