This paper examines the growth of the UK coworking space (CWS) sector in the context of the COVID-19 pandemic, drawing on data from a multi-year study comprising 44 interviews with CWS owners, managers, and other key economic actors. The paper offers a novel contribution by drawing on critical political economy to conceptualise CWS as capitalist enterprises providing fixed capital of an independent kind in competitive markets increasingly shaped by changing urban commercial real estate dynamics which necessitate that CWS adapt their business models to remain economically viable. The paper finds the entry of large corporate actors in the CWS sector is forcing smaller independent CWS to diversify to remain competitive. This pressure inhibits the ability of CWS to adhere to – and offer services matching – the aims of early CWS, namely the cultivation of a community of like-minded individuals who cowork to reduce rental costs and social isolation. These findings are theoretically and empirically significant as they illustrate how rapid sectoral shifts are driven by business decisions with structural causes, rather than being due to the actions of individual users of CWS or the communities they serve. These findings have implications for understanding the future of coworking and provide new insights into how competition shapes and changes the business models and competitive strategies of enterprises.