Knotel, the US-based shared workspace provider that had raised over $560m from investors including a range of corporates, filed for Chapter 11 bankruptcy on Sunday.
Founded in 2016, Knotel had built up a network of some 200 flexible workspaces around the world tailored to the individual needs of its corporate clients.
However, the disruption caused by the covid-19 pandemic and the related social distancing measures caused the company’s user numbers to spiral and several customers ask for rent reductions, skip payments or cancel contracts.
A regulatory filing shows an affiliate of real estate services provider Newmark Group has supplied $20m in bankruptcy financing and made a $70 million stalking-horse credit bid for the company’s assets, which will be made available through a bankruptcy auction.
Sovereign wealth fund Kuwait Investment Authority’s Wafra subsidiary led a $400m round for Knotel in August 2019 that included property developer Mori Trust, e-commerce holding company Rocket Internet, trading group Itochu and Bloomberg Beta, the venture firm sponsored by media group Bloomberg.
Real estate advisory Newmark Knight Frank, Mercuria and Norwest Venture Partners (NVP) also contributed to the round, which valued the company at more than $1bn. NVP had invested $50m to lead a $60m round in late 2018 backed by Bloomberg Beta and Newmark Knight Frank.
Newmark Knight Frank and real estate holding group The Sapir Organization had co-led Knotel’s $70m series B round earlier in the year, investing with property developers Wolfson Group, Moinian Group and Wainbridge Capital at a reported $500m valuation.
Rocket Internet and Bloomberg Beta had joined Invest AG, a vehicle for financial services firm Raiffeisen’s bank group of Upper Austria, as well as 500 Startups and various individuals to provide $25m in series A funding for the company the previous year.
