PEF for Indonesian Sharing Economy
H&C Partners, a Korean private equity fund, invested 6 billion won (US$5.4 million) in EV Hive, the largest office sharing company in Southeast Asia, earlier this month as part of its investment in a listed company (Series A). Its stake is around 10%. This marked the first time that a Korean PEF acquired a stake in a local company in Indonesia and made investment in a sharing economy company.
The investment was made through funds established jointly with Tigris Investments, which initially invested in Fast Five, a Korean office sharing company. "With the growth of the shared office business, Korean institutional investors who found the growth potential of the Indonesian market with the growth of the shared office business had strong investment confidence so the first funding exceeded the target amount,” an IB official said. “Additional funding is underway.”
Shared offices are popular in Korea as a service that leases office space at a low cost to one-person companies, start-ups and foreign companies which feel financial burdens due to high rents of conventional office space. There is no deposit in the service which provides desks, chairs and printers, office supplies and even networking services for start-ups.
In the case of EV Hive, since its establishment in 2015, more than 2,000 companies have moved into EV Hive’s shared office space, making EV Hive the largest shared office company in Southeast Asia. The company achieved a high growth rate of 1,200% last year. The IB industry believes that need for shared office companies such as EV Hive will grow in Indonesia as Indonesia has a strong economic growth engine, but it is difficult for start-ups to stabilize their business early due to expensive rents and poor traffic.
"H&C Partners will become an Indonesia-specialized PEF in search of a niche in Indonesian economy networks led mainly by Chinese people," the IB official said.