Singapore-based JustCo has closed on a Series B funding round that brings its valuation to $200 million, making it the most valuable co-working operator in Southeast Asia, after bagging a $12 million investment from Thai developer Sansiri. The new funding will be used to power the startup’s expansion into other markets in the region, giving JustCo a boost in the accelerating battle with rivals including US co-working giant WeWork.
The shared office brand announced the new valuation this week, following the investment by Sansiri which the Bangkok-based property group disclosed in a filing last month. Through its Singaporean unit, Sansiri Global Investment, the group purchased a 6.09 percent share in JustCo parent JustGroup Holdings.
“We spent the last 5 years building up a platform with the vision of becoming the dominant player of co-working space in Southeast Asia,” commented Kong Wan Sing, founder and CEO of JustCo in a statement. “Our inroad for Bangkok is laid when we partner with Sansiri, one of the largest property players and the only fully-integrated developer in Thailand.”
JustCo Gets Capital for Southeast Asia Growth
Launched in late 2015, JustCo is one of Singapore’s leading co-working brands with four centres currently open in the city-state, covering 180,000 square feet (16,723 square metres) of space. The provider of high-end flexible space is operated by Just Group, which started up serviced office platform JustOffice in 2011.
JustCo says it will use the new capital to fund its rapid growth in Southeast Asia, with plans to launch new centres in Bangkok, Jakarta, Kuala Lumpur, Ho Chi Minh City and Manila in the first half of 2018. The company aims to expand its platform to 30 locations by 2018, with a total floor area of more than 1 million square feet (92,903 square metres).
This past July, JustCo announced it was merging with Shanghai-based co-working startup naked Hub to create Asia’s largest premium shared office network, with 41 locations covering 140,000 square metres of space. Kong informed Mingtiandi that the most recent capital infusion will go directly to JustCo rather than the merged entity, a decision that both partners are said to have agreed was in the best interests of shareholders and potential investors.
The JustCo chief also revealed that the company plans to continue its expansion in China, with new centres to launch next year under the JustCo brand. The firm is shooting to be the most valuable co-working operator in Asia within one to two years, Kong said.
Thai Developer Dabbles in Co-Working
Through the investment in JustCo, Sansiri, one of Thailand’s largest real estate developers, is raising its bet on the region’s emerging flexible office market. Sansiri CEO Apichart Chutrakul noted in the statement that the company sees strong potential for the co-working trend to take hold in Thailand and the rest of Southeast Asia.
The listed property group, which specialises in building houses and condos, previously teamed up with Bangkok-based co-working operator Hubba to open a space in Sansiri’s Habbito mall in Bangkok. A study last year found that Thailand already has 120 co-working spaces.
Investments in co-working operators are increasingly in vogue among Asian developers with Singapore’s CapitaLand having backed shared space startup the Great Room through a venture capital fund, and SG-listed CDL having now invested more than $40 million into mainland flexible office provider Distrii.
Shared Office Players Expand in Southeast Asia
The investment from Sansiri comes at an opportune time for JustCo, as competition heats up with WeWork, the world’s largest co-working brand. The $20 billion New York-based giant recently raised $500 million for its expansion in Southeast Asia and Korea, as part of a $4.4 billion capital haul from Japan’s SoftBank and Vision Fund to fuel its growth in Asia.
In tandem with that investment, WeWork also acquired Singaporean co-working brand Spacemob, which has two locations in the city-state and plans to open more in Indonesia and Vietnam. WeWork says it has one centre opening soon in Singapore.
Another rising star in Asia’s co-working firmament is Beijing-based UrWork, the $1.4 billion startup founded by former China Vanke executive Mao Daqing, UrWork rolled its first overseas location in Singapore earlier this year and last month invested in Indonesia’s ReWork, which has two co-working locations in Jakarta and four more in the pipeline.
According to recent figures released by global property consultancies, Singapore has around 90 co-working centres, most of them run by local operators; Malaysian capital Kuala Lumpur has 44 venues operated by 36 different players; and Vietnam’s largest metropolis Ho Chi Minh City has 10 such locations, offering 7,500 square metres of space as of this past April.