Flexible-office provider Knotel lost $223 million last year — even before coronavirus flipped the office market on its head.
Company financials, obtained by Business Insider, reveal the startup lost $49 million during the first quarter, ending the period with $36 million in cash on hand. At the time, it reported total assets of $110 million, less than half its total liabilities of $238 million, including $84 million in accounts payable.
A Knotel spokesman disputed the numbers, saying the company had a “solid” first quarter. “Q2 so far still has us tracking to be profitable around year-end,” the spokesman said.
Founded in 2015, Knotel was among the fast-growing companies in the flex-office space, operating 5 million square feet in 16 cities worldwide. Most recently, it was valued at more than $1 billion after raising $400 million last year.
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But even before the pandemic hit, Knotel, which once cheered WeWork’s demise, ran into financial trouble. It cut one-third of New York jobs in January, and then slashed its workforce again in March when the pandemic struck and small businesses and other tenants stopped paying rent or exited their spaces. “Business as usual is over,” CEO Amol Sarva said at the time. “We’re going to prepare for the worst case.”
First-quarter financials show Knotel had $314,401 worth of credit-card liabilities at the end of 2019. At the end of the first quarter, $99,843 was credited back to its balance sheet.
Knotel has projected $350 million in revenue this year. In the first quarter, it generated $74 million in revenue with $6.6 million in gross profit. [Business Insider] — E.B. Solomont