Amot Sarva, Knotel cofounder, pictured, is no longer a starting Chief. (Photo by David Paul Morris / Bloomberg)
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Knotel, the flexible startup office that applied for protection from bankruptcy earlier this year, has found a new director: Michael Gross, who was vice – chairman of another company backed by SoftBank, WeWork. He replaces Amol Sarva, a Knotel accountant, who has been CEO since 2015 and has been a distinguished WeWork critic.
Gross’s brother, Eric, will also be Knotel’s co-president, along with Yoav Gery, who is currently president of Selina, a hosting brand, according to his LinkedIn page. The Wall Street Journal they first reported on the news.
It’s been a turbulent year for Knotel – valued at more than $ 1 billion. Last spring, at the onset of the pandemic, the company laid off 30% of its workforce and consolidated a further 20%. Afterwards, Knotel made headlines for unpaid rent at several of its sites, prompting a lawsuit from landlords.
Amidst the uproar, Sarva said Forbes in July that a brighter future was to be seen. “There is still one more funding before the company is fully profitable and growing in a way that could be a public company,” he said. There were rumors at the time that Knotel was trying to raise $ 100 million – although it seems that these funds never came into existence.
The breaking news, which came in February, highlights Covid ‘s damage to Knotel and the wider commercial real estate market. Demand for office space has fallen more than 50% in most major markets as companies have moved to work-from-home models. That has affected flexible office companies as well. Also on Monday, the Financial Times WeWork reportedly lost $ 3.2 billion in 2020.
Speaking to the Iris, Gross hit a tone of optimism. “I see a break not as a reflection of the product, which was in many ways ahead of its time, but as a sign of the uncertainty in the market,” he said.
Knotel was recently sold to Newmark Group, a commercial powerhouse with $ 1.9 billion in annual revenue, which previously invested in 2018. Newmark promises, when Covid eventually assumes, that companies will tend to sign flexible office space contracts rather than long. -term rent.
“Our construction of the Knotel business was driven by the critical role that flexible office solutions will play in the future of the workplace,” Newmark CEO Barry Gosin said in a statement. Newmark reportedly paid just $ 70 million for the industry, so roughly speaking, it’s a cheap bet.