Serviced office provider Knotel is looking to raise up to $100 million as it faces high vacancy rates around the world.
One source says that the round coordinated by a European company could cut Knotel’s reported valuation of $1.6 billion in half.
Amol Sarva, founder and CEO of Knotel, declined to confirm these reports and said that “there is still one more financing before the company is fully profitable and growing in a way that is potentially a public company.”
The past few months have been bumpy for the New York-based company as it was forced to lay off half of its employees in March right before the inevitable economic downturn.
“Looking at how the U.S. government was behaving, I could not draw any confidence,” said Sarva. “It was pretty clear that it was going to be a lot worse of a problem than it should have been.”
During the second quarter of 2020, Knotel’s revenue fell by 20% to around $59 million, but Sarva adds that this is still double last year’s second quarter. He also expects that the company will become profitable by the first quarter of 2021.
“The flexible workspace and coworking industry was born to help companies unlock agile real estate strategies, so COVID-19 has amplified the inherent advantages of this sector,” said Francesco De Camilli, the head of flexible workspace consulting at Colliers International. “As companies return to the workplace and occupiers begin transacting again, flexible workspace will account for a higher share of workspace transactions than before.”