"In light of the current capital markets condition, the Company is considering other alternatives and has determined not to proceed at this time with the offering and sale of the securities proposed to be covered by the Registration Statement. The Registration Statement has not been declared effective by the Commission and the Company confirms that no securities have been sold pursuant to the Registration Statement," CEO Zhuangkun He wrote in the document requesting the cancellation of the planned IPO.
Monday's SEC filing, which effectively canceled the IPO, did not specify which alternatives Ucommune was exploring. But in July, a NASDAQ-listed company called Orisun announced that it was merging with Ucommune, a move that effectively would put Ucommune on a U.S. exchange without the hassles or scrutiny of a conventional IPO.
The withdrawal comes days after President Donald Trump proposed new SEC regulations that would give U.S. regulators expanded access to the financial audits of companies seeking to list on American exchanges.
The canceled IPO's goal was around $100 million, according to a December 2019 SEC filing. In the filing, Ucommune described fast growth and attributed its success to strong real estate practices. "Since the launch of our first co-working space in September 2015, we have replicated our success across China and expanded our footprint overseas by leveraging our strong management and chain operating capabilities,” the company wrote. “We had 197 co-working spaces across 41 cities in Greater China and Singapore as of Sept. 30, 2019. As of the same date, we had 171 spaces in operation, providing approximately 72,700 workstations to our members, and we also had 26 spaces under construction or preparation for construction, most of which we expect to be in operation in the fourth quarter of 2019 and throughout the year of 2020."
The Financial Times reported in October 2019 that Ucommune, with an estimated value of $3 billion at the time, planned to launch a U.S. IPO. The paper quoted James MacDonald, director of China Research at Savills Property Services, as having said: "China’s co-working space has seen a great expansion over the last three to five years, but the barriers to entry are low and it’s a hard space to be in."