After Singapore-based coworking operator JustCo walked away from a deal that would have merged the company with WeWork’s closest rival in China, Naked Hub, it was almost certain that the firm may not bounce back.
“It was painful to kill the merger because I had no clue how to grow the business anymore,” said Kong Wan Sing, CEO of JustCo. “If I don’t merge to get bigger, I get consolidated or I get killed off.”
Using $5 million in seed financing from family, Kong launched JustOffice in 2011 in downtown Singapore. By 2015, JustOffice was the largest coworking space firm in the areas, which is when the funds started to roll in. From 2015 to October 2017, the company raised $20 million that would go towards its expansion to the rest of Asia.
In the meantime, coworking giant WeWork was also expanding throughout Asia. That is when Kong reached out to Grant Horsfield, co-founder of Naked Group, to create a partnership that would fend off WeWork. As the idea of a merger became reality, Kong said that the two had clear differences in managerial methods, and the plans eventually fell through.
In May 2018, Kong reached a deal for JustCo to sell 70% of the company to GIC, Frasers and himself for $177 million. Around the same time, Horsfield sold Naked Hub to WeWork for $400 million.
Now, JustCo is now on track to triple its regional footprint by the end of 2019 to over 140,000 square meters and is working to raise $500 million in new funding.