How JustCo, a $200m co-working operator, sets itself apart

Asia isn’t short of co-working spaces.

A report by global real estate firm Jones Lang LaSalle shows that the supply of co-working spaces is increasing at a faster rate in the Asia Pacific than in any other place in the world. Flexible floor space in the region is expanding at 35.7% each year, compared to 25.7% in the US and 21.6% in Europe.

Co-working spaces believe they are capitalizing on the growth of budding entrepreneurs in Asia, who have unique needs. It is also the reason why Kong Wan Sing founded JustCo with Liu Lu and Kong Wan Long in 2011.

JustCo -coworking space, Singapore. Photo credit: DIA Brands.

After graduating from New York University, Wan Sing chose to move to Boston and start his own finance firm instead of working at investment bank Goldman Sachs. Being a new entrepreneur made him realize that startup founders and business owners needed more than just an office.

“We needed low-cost and flexibility in the lease, support in setting up the office, access to network, speed, and convenience, and most importantly, cost savings,” he recalls. “So there was an opportunity to help other entrepreneurs and owners who were facing the same issues.”

An in-house team of space planners and interior designers conceptualize each JustCo venue, which contain the usual fixtures and furniture. These places also host and offer business and recreational events regularly.

Carving a niche

The JustCo community spans over 30 locations across Asia and more than 17,000 members. In comparison, US-based rival WeWork has 466,000 members across 485 locations across the globe.

When looking at these numbers, it’s important to keep in mind that unlike ride-hailing, for example, co-working isn’t a winner-takes-all market. The economics are clear as it’s essentially a subletting business with a service layer.

User retention is high in co-working spaces because the cost of switching offices is no joke. But that also means user acquisition costs can be expensive. And with the abundance of co-working options in the region, JustCo have to figure out how it can stand out from its competitors.

Co-working operators also face the risk of signing long-term leases – an arrangement that involves committing themselves to years’ worth of future rent. This might become a struggle to pay off in the event of an economic downturn, which could push clients to drop memberships. This is why WeWork is moving towards owning properties outright.

JustCo founder and CEO Kong Wan Sing (center, front) / Photo credit: JustCo

JustCo has moved beyond directly serving space-seekers. It’s been building partnerships with other companies and managing spaces for landlords and property owners. In 2018, the company partnered with Singapore’s sovereign wealth fund GIC and multinational firm Frasers Property on a joint investment of US$177 million.

Expansion plans