The founders series takes a deep dive into the journey of Antler portfolio company founders and sheds light on the space they are building in. This week, we spoke to Sophie Jokelson, co-founder and CMO of Cove.
Cove is a coliving company putting renters first. They make it easier, faster and more flexible to rent comfortable homes at honest prices. Their flatshare rooms, studios and apartments are hand-picked in top city locations, thoughtfully furnished and include utilities. The bookings process is digital and hassle-free, and the community of ‘Coveys’ get access to a network of like-minded people as well as exclusive events and perks.
Co-ve is an abbreviation of co-live but the word itself connotes a place of refuge for explorers, pioneers, pirates and adventurers. It’s a safe haven, a place sought out for shelter, rest and to let down your guard. It’s everything you’d want from a home, which is exactly what we do!
My two co-founders and I are your typical urban nomads, having collectively lived in 13 different cities around the world, rented over 30 different properties, and been landlords ourselves. Through countless personal experiences, we’ve felt first-hand the broken state of the legacy residential rental market. With analogue processes, reams of paperwork, and opaque pricing, it simply isn’t fit for 21st-century life. Our passion and experience for building consumer businesses led us to take on the challenge of putting renters at the centre of the home rental experience. With the goal to make booking a comfortable home as easy as booking a Grab, Cove was born.
The real-estate industry typically optimises residential property for sale and so the design principles centre on maximising price per square foot and appealing to the higher-paying nuclear family unit. The reality is that renters are typically younger, increasingly single for longer and have much more flexible social and community needs from their homes. We therefore optimise Cove homes to meet the functional, emotional and lifestyle needs of renters in this demographic. This is particularly needed across Southeast Asia, where you have millions of young people moving to urban centres to study and work. With growing demand, these people struggle to find safe, comfortable and affordable places to live, often being forced to settle for long commute times and dealing with difficult landlords.
Ultimately we are fortunate that the residential real estate sector is pretty resilient. People always need places to live and in times of uncertainty, the flexibility of our offer (with only 3 month minimum lease terms) means we are a very valuable solution for many people. The onset of COVID-19 was still a challenging time for us in Singapore as our core target market were expats newly arrived in the city and this segment disappeared overnight. Whilst we felt some short term impact from this, we were fast to adapt and identify new consumer segments to cater to, such as those affected by the disruption of the pandemic who required flexible rental options and young Singaporeans who needed more space to work from home.
The beauty of being an agile young start-up meant we could quickly adapt our product to better meet the needs of these types of customers and we were quickly able to make up the volume of demand and continue to grow throughout the pandemic.
We have just hit the milestone of having housed over 1000 tenants to date and every single day has been a great opportunity to learn more about what our customers need and how to serve them better. Getting regular customer feedback is a really important part of nailing your product market fit, which is the primary success factor for a young start up. By seeking regular input from our customers we have evolved considerably since our early MVP which was a 4 bedroom apartment we rented and furnished ourselves after a trip to IKEA!
The most significant change we’ve made recently is to diversify our offering so that we can better cater to a larger pool of demand. We have segmented our product offering into three tiers: Basics, Classics and Luxe, which allows us to provide spaces ranging from $1000 to $5000 per month and optimise each pricing tier for what the customer really needs and wants proportionate to the price point.
We are very bullish about the potential of co-living in this region with the continued growth of urban centres and economic development in countries with vast millennial and Gen Z populations like Indonesia, Vietnam and the Philippines. Shared housing has long existed as a way to rent more affordably and we expect it to grow due to the increasingly mobile young population who have more flexible lifestyle needs. We estimate the market is worth around $30 billion in Southeast Asia alone. The current pandemic has only heightened the consumer desire for higher quality, cleaner and safer places to live and so by professionalising shared living, making it higher quality, more accessible and convenient through technology, allows us to satisfy this latent demand and build a compelling new way to live.
Call us crazy but when the pandemic hit, we barely questioned our plans to proceed with our new country launch in Indonesia. We knew what a big opportunity it was and were confident that it was still the right thing to do as the demand for homes to rent remains high. Of course it has been challenging, most notably because the founders have not been able to travel there at all, but we’ve got a great team on the ground and we’ve been able to gain a strong foothold. Our biggest achievement so far was partnering with real estate developer Lippo to build Southeast Asia’s first dedicated student co-living close to UPH university in Karawaci which is set to launch later this year. Our main learning is absolutely to invest in a stellar launch team with local market expertise and to clearly understand which aspects of your product and value proposition are universal and which aspects must to be adapted to cater to local market nuances.
Yes- we were delighted to raise US$4.6m in December last year and welcome onboard our new shareholders, real estate conglomerate Keppel Land and European VC fund Idinvest. Finding a strategic partner in Keppel Land has been a fantastic boost to our business. It’s great to be recognised by an industry incumbent that really believes in our vision and can support us to grow faster. With their scale, our goals to expand rapidly across the region can be realised and we are already working closely on several opportunities.
My advice to founders currently on the fundraising journey is to stay resilient and always believe in your vision, it’s normal to get plenty of knock-backs and this has been true for many unicorn businesses today. It doesn’t mean what you’re doing isn’t a huge opportunity so you just have to stick at it, cast your net wide and find the 1 or 2 people who really buy into what you’re doing. The other practical consideration is to start fundraising earlier than you think you need to, especially in these more turbulent economic times. It can take a while to close the process and you don’t want to be compromised by getting too close to the end of your runway.
Cove’s goal is to empower a generation of young, ambitious Southeast Asians by providing them with safe and comfortable homes while they strive for their ambitions. We are well on track to becoming the number 1 player in the region with a strong top-line growth trajectory. We are focused on building a sustainable business model so that we can continue to create value for our customers, employees and stakeholders long into the future.