WeWork competitor Knotel raises $400m from Kuwaiti fund

Flexible workspace provider targeting expansion into the 'world's 30 largest cities'

Kevin O'Leary, head of O'Shares ETFs and an investor on the US TV show Shark Tank, told a World Government Summit virtual event that companies will learn to operate using 20% less office space. AFP

A three year-old competitor to WeWork has secured $400 million (Dh1.5 billion) in a new round of funding led by Wafra, an investment arm of Kuwait's sovereign wealth fund.

Knotel is a New York-based flexible workspace provider which manages more than 370,000 square metres of space in more than 200 locations in cities such as New York, San Francisco, London, Los Angeles, Washington DC, Paris and Berlin, among others.

The company said it will use the new money to grow its footprint in existing markets and "continue expansion into the world's 30 largest cities". It also said it would "accelerate recent innovations" such as Baya — an internal blockchain platform used to support data-driven acquisitions — and a system known as Geometry aimed at streamlining its delivery model.

“Knotel is building the future of the workplace, and we are excited to welcome a group of investors who believe passionately in our product, vision and ability to execute,” said Amol Sarva, the company's co-founder and chief executive. “Wafra will help us continue our rapid global expansion and solidify our position as the leader in a fast-growing, trillion-dollar flexible office market.”

The latest $400m funding round values the company at over $1 billion, Knotel said in a statement, and brings the total the company has raised to date to $560 million. Investors to participate in the latest round alongside Wafra include three Japanese firms - real estate company Mori Trust, trading conglomerate Itochu and equity investor Mercuria.

Wafra is an alternative asset investor with assets and commitments of about $24bn. Its other investments include The Avenue, a luxury apartment building in Washington DC and in private equity firm TowerBrook Capital.

Competitor WeWork's parent firm The We Company last week revealed plans for its IPO. WeWork has raised more than $12bn in funding since its launch in 2010. The company has received backing from Japan's SoftBank Vision Fund. Its IPO filing revealed that last year, the company declared a net loss attributable to its shareholders of $1.6bn on revenue of $1.8bn.