As if facing off against WeWork in the flexible office market isn’t enough, Knotel is now going after property data behemoth CoStar.
The New York-based startup plans to launch an online office listing data platform dubbed KnotelKoin, according to an email the company’s founder Amol Sarva sent to acquaintances and business partners Thursday. The platform will be based on blockchain technology: participants can add and verify information about particular office spaces through a peer-to-peer ledger system.
Users who add information to the blockchain (for example the size of a space or its rent history) are rewarded with digital tokens, whose value can increase over time and which can be used to pay for transactions on the platform, according to a white paper on KnotelKoin’s website. The company is planning a so-called initial coin offering for the tokens in the third quarter of 2018.
“The current system creates a fragmented market where controllers like CoStar lack any incentive to share their data with the public and/or technological resources to produce a clean dataset or innovate on offerings,” the white paper reads. “Without access to verified and up-to date information, tenants and landlords alike need to contract intermediaries (e.g., agents and brokers) to lease and rent commercial space, thereby inflating the cost of finding office space and reducing flexibility.”
CoStar currently has a tight grip on the commercial leasing data business following the December bankruptcy of its biggest rival, Xceligent. KnotelKoin’s peer-to-peer philosophy is somewhat similar to CompStak, a crowdsourced commercial property database. CoStar has a history of suing upstart competitors for copyright infringement and has filed cases against RealMassive and Xceligent, among others.
Knotel, founded in 2016, takes office space under leases or management agreements and then sublets it to companies under flexible terms. The company raised $25 million in a Series A fundraising round in early 2017 and has expanded to more than 700,000 square feet of office space in New York and San Francisco.
Sarva recently sat down with The Real Deal for a video interview in which he dished on the future of the office market and his company’s rivalry with WeWork.