Startup Coworking Space "CoHive" Officially Collapsed

Startups co-working space CoHive declared bankrupt by the Commercial District Court at the Central Jakarta District Court, this decision is contained in the decision of the Commercial Court at the Central Jakarta District Court Register No: 231/Pdt/Sus-PKPU/2022/PN.Jkt.Pst, dated 18 January 2023.

"Declaring that the respondent PKPU (PT Evi Southeast Asia) is in a state of bankruptcy with all the legal consequences as of the date this decision was pronounced," the announcement read, quoted on Wednesday (1/2).

Based on the announcement, Rio Sadrack M. Pantow and Benny Marnala Pasaribu were appointed as the curatorial team. Bankrupt debtors, creditors, and the tax office are asked to witness trials and other meetings.

The first trial was held today (1/2) at the Commercial Court at the Central Jakarta District Court at 10.00 WIB. Meanwhile, the deadline for filing creditors is February 9, 2023 at 10.00 WIB to 17.00 WIB.

Quote from Dataword, previously the Commercial Court at the Central Jakarta District Court ruled on CoHive, PUKPS or Temporary Suspension of Obligations for Payment of Debt on September 2, 2022. PKPU is a debt settlement mechanism to avoid bankruptcy.

The debtor can submit a peace plan by offering payment of part or all of the debt to the creditor during the period determined by the court. CoHive was given 45 days from the verdict.

There has been no official statement given by one of CoHive's initial investors, East Ventures, regarding this news to the media. However, when referring to the website, CoHive is currently included in the category exit portfolio.

CoHive journey

Apart from East Ventures, CoHive is also supported by other investors, such as Insignia, Naver Corp, and others. Finally, the startup announced series B . round in 2019 with a total equity fund of $40 million. According to sources, this funding catapulted the company's valuation to over $100 million.

CoHive was founded in 2015 as an internal project of East Ventures, which was originally called EV Hive. Then in 2017 it was taken over by Jason Lee, Carlson Lau, and Ethan Choi who changed their name to Cocowork, then changed again to CoHive.

The company is increasingly expansive to enter various cities. In 2020, the company operates 30 locations with a total area of ​​60 thousand square meters, in Jakarta, Medan, Yogyakarta and Surabaya. The services offered are quite diverse through CoHive membership, starting from workspaces, coworking, private offices, meeting rooms, up to you coliving.

Its final expansion in Surabaya was announced in 2019 with Tanrise Property and TIFA Property as strategic partners. In late 2020, CoHive investor Chris Angka took over as CEO of the company.

The co-working space industry

According to the Coworking Space Global Market Report 2022, predicts the market size of the industry co-working space global growth from $13,60 billion in 2021 to $16,17 billion in 2022 at a CAGR of 18,9%. The report also underlines that the growth of this business is greatly influenced by the increase in the number of startups, including the trend of flexible workspaces among young workers.

In fact, this business also experienced turbulence when the impact of the corona virus peaked in mid-2020. The expected number of declines in demand co-working space exceeding 50%, indicated by the work from home policy enforced by startup activists. In this era, the trend of hybrid work emerged – combining remote working and working in an office – making workers more flexible in determining their place.

It is very likely that CoHive was too expansive so it failed to reach the unit economy before the pandemic destroyed its business.

A similar player, GoWork is still operating in Indonesia. The company has pocketed additional Series C1 ammunition in 2021. Several investors joined, including Gobi Partners through the Meranti Asean Growth Fund, and have raised $3,6 million.

One of them is GoWork's investor, Indogen Capital, conveying his views regarding the prospects for this industry.

"Our hypothesis is that demand for co-working space will bounce back and continue to grow modestly. We see that the future of working will be hybrid, people are used to new work productivity during the pandemic but at the same time don't want to lose their social function to meet face to face. As a result multi-location access from co-working space will be a strong moat in the long term to address this change of behavior," said Vice President of Ingene Capital Kevin Winsen.