KNOTEL CO-WORKING SPACES CHAIN FILES FOR BANKRUPTCY

The international chain Knotel failed to withstand the pandemic and filed for bankruptcy protection in the US court. The company intends to go through the necessary legal procedures so that the Newmark Group, which operates in the North American commercial real estate market, could acquire it. The buyer pledged to pay off debt obligations and pay salaries to employees during the bankruptcy period, having allocated about $ 20 million.

The founders of Knotel are American Amol Sarva, who is the chief executive officer of the company, and Russian Eduard Shenderovich, who previously gained fame as a founder of SUP Media, which bought LiveJournal.

Founded in 2015, real estate startup Knotel became a service for large corporations that lease office space for their employees.

Earlier, in one of the interviews, Shenderovich compared Knotel with the Airbnb project, calling it a managed marketplace where tenants can “hang out” for a fairly long period (up to a year or more). The main competitor of the project, according to the founder, was WeWork, which works mainly with clients from the field of small and medium-sized businesses. Knotel, on the other hand, positioned itself as a company working with large business sharks.

As a result, the startup quickly began to gain momentum, attracting millions in investments. Financial injections in the amount of $ 400 million, received in August 2019, replenished the budget of the company, which was estimated at $ 1 billion. According to analysts, during its existence, the Knotel project managed to attract about $ 560 million. Thus, having created about 200 co-working spaces in the United States and other countries, the company has secured investments from the Japanese construction corporation Mori Trust, Kuwait's national wealth fund Wafra, and many others.

According to co-founder Amol Sarva, the corporation found itself in the current difficult financial situation due to the pandemic.

The increasingly complex operating environment has had a negative impact on lease terms and key real estate markets in the majority of the US cities, said Sarva. However, experts note that the company faced financial difficulties back in 2019, long before the start of the pandemic. Despite revenues of $ 370 million, the company suffered losses of $ 223 million that year.

In 2020, the situation has even worsened. Knotel lost more than $ 200 million in the first ten months, having made a decision to lay off 30% of its employees. The income of representatives of the company's management was reduced. All negotiations on renting or buying real estate have been stopped. About 20% of employees were sent on vacation, and the company started looking for an investor who could bring about $ 100 million to cover the losses.