Company overview

Ucommune provides offices and workstations to businesses ranging from small firms to large enterprises. Under U Space, it leases premises from landlords, pays for fit-out and operations, and collects monthly fees from members. Workspace membership supplies most of its revenue. It also works with landlords through U Partner, sharing workspace revenue, and U Brand, charging landlords for branding and management services while landlords bear most fit-out costs. The company plans to focus more on these less capital-intensive arrangements.

The business depends on keeping workstations occupied, with two large membership customers supplying a substantial share of revenue. Members can leave on one month’s notice, while Ucommune’s own property leases generally run longer and require fixed payments regardless of occupancy. Losing members can therefore leave it paying rent on unused space.

Much of its China business operates through companies it controls by contract rather than owns directly. These arrangements also provide access to licenses and assets. Chinese restrictions on foreign ownership of value-added telecommunications services mean that business runs through Beijing U Bazaar; Ucommune depends on the contractual arrangements remaining enforceable.