Knotel CEO Amol Sarva (Credit: iStock)
Well, another unicorn has joined the co-working corral.
Knotel raised $400 million, bumping up its valuation to at least $1.3 billion, according to Bloomberg. Investors this round included Kuwait-backed Wafra and Japan’s Mori Trust, Itochu and Mercuria Investment. Previous investors, including Newmark Knight Frank, Norwest Venture Partners and Sapir Organization, also participated in this round. The fundraising was in exchange for 15 to 30 percent of the company and was double the amount initially reported by The Real Deal in April.
The infusion of capital comes as co-working giant WeWork’s parent, the We Company, gears up to go public. Critics have raised concerns about the We Company’s business model and whether the $47 billion company can weather an economic downturn.
“Some of the largest asset managers in real estate have doubts about the WeWork model,” Knotel co-founder and CEO Amol Sarva said in an interview. “In looking for an alternative, they found us.”
Knotel’s clients are primarily major companies, including Microsoft, Starbucks and AT&T. WeWork, on the other hand, leases desks out on an individual basis. The company has more than 4 million square feet of flexible office space and plans to expand in its existing locations — New York, San Francisco and Los Angeles — and also venture into new cities, including Chicago, Houston, Dallas and Atlanta, as well as Tokyo, Hong Kong, Seoul, Shanghai, Beijing, Shenzhen, Hong Kong, Singapore, Mumbai, Delhi, Bangalore and Hyderabad. [Bloomberg] — Kathryn Brenzel