Knotel CEO says flex-office provider has new funding: report
Company has been hit with lawsuits over nonpayment of rent
As Knotel battles lawsuits from landlords, evictions and accusations of unpaid rent, its CEO says the flex-office provider has secured new funding.
Knotel CEO Amol Sarva reportedly told staff on Monday that the company has gotten a fresh influx of cash, according to Business Insider, citing a source with knowledge of the all-hands meeting.
Sarva did not disclose the amount of money raised or details about who was involved, although a source told the publication that it is a restructuring type of deal that includes equity and debt.
Earlier this summer, Sarva said he had raised $10 million and wanted to raise $100 million by the end of August. Forbes reported that the new funding could cut the company’s valuation in half.
In August 2019 the company said it raised $400 million through a Series C raise, which gave Knotel a valuation of at least $1.3 billion. Investors included Mori Trust, Itochu Corp, and Mercuria Investment Co, along with Newmark Knight Frank, Norwest Venture Partners, and the Sapir Organization, which is led by Alex Sapir.
This year, Knotel has suffered along with other co-working companies as demand for office space has lagged during the pandemic. The company has been hit with a dozens of lawsuits over the past few months from landlords who claim they have not been paid, as well as eviction notices at two of its spaces.
Knotel has also been scaling back its once-ambitious expansion plans and in November said it was looking to trim 60 percent of its 4.8 million-square-foot global portfolio. It has also cut staff several times over the course of the pandemic.
[Business Insider] — Keith Larsen