As digital startups mushroom in the country, Indonesia has seen a rising demand in the office-sharing segment in recent years. According to a report by Jones Lang LaSalle (JLL), the co-working space business in Indonesia grew 60% in 2018, while the number of operators grew 8%.
Enter CoHive, the largest co-working space in Indonesia. Previously known as EV Hive, the company was founded in 2015 by East Ventures before it was taken over by a group of entrepreneurs—Jason Lee, Carlson Lau, and Ethan Choi—in 2017.
Having closed its Series B funding round at USD 13.5 million, CoHive is setting itself apart from the competition by becoming the first Indonesian co-working space operator to manage an entire high-rise building.
KrASIA recently spoke to Jason Lee, co-founder and CEO of CoHive, about how co-working spaces are changing the concept of work in Indonesia.
KrASIA (Kr): How did you delve into entrepreneurship? How did you meet your co-founders?
Jason Lee (JL): I grew up in the US. I started my career at Deutsche Bank in New York City and then moved to Merrill Lynch in Singapore. Although I was working in investment banking, I’ve always been interested in startups. I had my own startup back in college, but I realized there was a limitation in doing business by myself. I wanted to understand how to grow a business so I worked with an entrepreneur named Dennis Melka, who was the co-founder of the Tune Group with Tony Fernandes. In the last portfolio company, I was the CFO of Nida Rooms. From there, I met CoHive’s other co-founders, Ethan and Carlson.
Kr: How did you start CoHive?
JL: The story of CoHive goes back to 2015 when it was originally known as EV Hive. It started as a part-time initiative from East Ventures [an early stage investor in Southeast Asia] with no one working on this full-time. EV Hive had two locations in South Jakarta and BSD City and they made up a pretty small space, only 450 square-meters combined. In May 2017, Carlson, Ethan, and I bought and took over the business and transformed it into CoHive.
Kr: How’s CoHive’s growth so far?
JL: Since we took over, CoHive’s space has expanded from 450 square meters in two locations to over 66,000 square-meters across 31 locations in four cities, Jakarta, Medan, Yogyakarta, and Bali. From 90 members in 2017, now we have more than 9,000 members from over 800 companies.
In addition to our core co-working space business, we also added new products, like CoRetail, CoLiving, and CoHive event spaces.
Kr: What led you to become interested in co-working spaces in the first place?
JL: As an entrepreneur myself, I understand that starting something is a very long path. Most of the time, entrepreneurs who have just started work alone and until late at night. And there is no community connecting founders to other founders. So one of the main missions of our co-working space is to connect entrepreneurs with their peers.
We saw co-working as having huge potential in Indonesia because the most common business problem here is expensive office space.
If you want to set up an office, you need to pay 12 to 24 months’ rent upfront. This is a common requirement for renting office spaces in a building or shophouse.
Kr: How do you think co-working spaces help to shape the entrepreneurial landscape in Indonesia?
JL: Besides the rental and mentorship benefits I mentioned earlier, co-working spaces also allow entrepreneurs to connect with potential partners to expand their business.
We’ve seen many companies that started from one co-working desk two years ago, to a small private office, and now an entire floor as they partner and grow.
We ourselves have entered into partnerships with several institutions that share the same spirit.
For example, we collaborated with Jakarta Smart City to build a coworking and event space called JSCHive in South Jakarta, and we also partnered with BTPN Bank to provide space and support that is specifically aimed at developing the fintech ecosystem.
We believe that the presence of co-working spaces encourages more organizations to support entrepreneurs and SMEs in growing their ideas and businesses.
Kr: What activities does CoHive provide for its members?
JL: We have around 40 to 60 events each month, from “meet and greet” events for founders, to “speed dating” with VC firms, and presentations where we invite industry experts to give lectures to entrepreneurs so they can continue to learn and grow.
As our community expands, they also start to create their own events and we support them by providing event space for free or help with getting sponsors for their events.
KR: Please tell us more about the newly launched CoHive 101 building.
JL: It’s a very exciting time for us as we’re the first Indonesian co-working space operator to manage an entire high-rise building. Not only do we provide basic services like co-working spaces, meeting rooms, and regular activities, we also have new services like event spaces and co-retail spaces for SMEs to showcase their products targeting startups. We’ve seen that it is difficult for SMEs to open a shop in the shopping malls as they need to sign a lease that lasts three to four years.
In August, we’ll launch pop-ups and Instagram “box shops” where online shops can book a space from one day to one month at an affordable price to display their products.
We also have permanent retail spaces and canteens. We’re currently partnered with GoFood Festival, Fore Coffee, PepeneroBakery, and others to provide food and drinks.
We also provide entire floors for growing companies that want more privacy, and we’ll soon add a fun floor with sleeping pods and games for people to relax for a bit.
The idea of CoHive 101 is that we want to create a whole experience, so when you enter the building, you don’t need to leave because you’ll have everything you need here.
Kr: You also have a new product called CoLiving, what’s the story behind it?
JL: The mission is to provide a place for living, work, and play. Based on experience, the first question members have for us when they sign up is, “Do you know the nearest place where my employees and I can stay?”
There’s a huge demand for such housing in the market. People want to live near their office because the traffic in Jakarta can be very stressful. There are two groups of shared living facilities in Jakarta; a simple boarding house with basic facilities and an expensive full-serviced apartment.
We try to fill the gap between these two groups by offering full services and comfortable rooms at affordable prices, surrounded by like-minded neighbors. In addition, our CoLiving spaces offer access to the gym and swimming pool, communal areas like a theater room, the pantry, and a living room where people can hang out and discuss their ideas.
Our first CoLiving space is situated in West Jakarta and only costs about IDR 3 million (USD 213) per month, which is considered cheap. It was launched in May and it has a 90% occupancy rate. We’ll launch the second CoLiving space in September and almost 50% of the rooms have already been booked. The third coworking space will be launched in the fourth quarter of this year.
Kr: How do you see the competition between the various co-working space operators in Indonesia playing out?
JL: We don’t see other players as competitors because the market is large. Many may compare us with WeWork, but we actually target a different market segment. WeWork offers more premium products and services. WeWork is fancier and more expensive like a Mercedes-Benz, while CoHive is more like Toyota; we offer high-quality services but at more affordable prices so we can make a bigger impact in the community.
I think Indonesia is a big market for all of us and co-working is a pretty new concept. More people and companies are becoming aware of it now, so demand is really big.
Kr: Describe your a-ha moment when you felt CoHive might actually become a success.
JL: In 2017, most co-working spaces were located in coffee shops or shopping centers, but space was still quite limited. I think our a-ha moment happened when we partnered with a big property company called Keppel Land. They had empty space in an office building in Jakarta’s Sudirman business district. It was 1,500 square meters, which was three times bigger than our first space.
Taking it was a huge decision for us because we weren’t sure if co-working would work in an office building, especially since the building management had strict rules.
However, we were very excited about it. Shortly after launching, the space was occupied very quickly.
As it turned out, entrepreneurs were looking for a convenient location with a professional image, and the co-working space trend shifted from coffee shops to our managed environments.
We’ve been scaling the business quickly since then. For example, we’ve taken several other floors in that building and we have our own high-rise.
Kr: What’s next for CoHive? When do you plan to close your Series B funding?
JL: Our focus is to expand to other cities this year and continue developing CoLiving and CoRetail.
We’ve been talking with lots of investors and we expect to raise USD 20 million and close the Series B round in the next several months.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in Southeast Asia.