EXCLUSIVE: London’s Broker Of Choice For Startups And WeWork Is Opening In NYC
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Kontor, the niche London tenant rep firm which advises some of the U.K.’s fastest growing and best known tech businesses, is expanding to New York.
The four-year-old firm will officially open its New York office in January and has already completed a handful of deals in the city, including the first NYC office for Revolut, the online bank and fintech company valued at $1.7B now launching in the U.S.
Kontor’s move is designed to increase the flow of U.K. tech companies expanding to the U.S., by not only helping them with their real estate needs, but also other elements of expansion like legal advice and a network of potential partners.
And it will be closely watched on both sides of the Atlantic: Kontor is the first niche U.K. broker to set up shop in the U.S. in living memory.
The New York office will be headed up by co-founder James Townsend, with support from Chief Operating Officer Alexandra Sutter.
Kontor was set up by CBRE alumni Townsend and Luke Appleby. Their plan was to establish a business specifically targeted at advising tech startups on their office needs. As the companies grew, they would need to move to larger premises, providing a good source of repeat business.
The business model was turbocharged by one particular client: WeWork.
While at CBRE, Townsend was introduced to founder Adam Neumann in the coworking giant’s early days, before it had expanded to London. Soon after leaving to set up Kontor, he received a call from Neumann to represent him on a deal, and the company’s very first transaction was advising WeWork on taking 167K SF in the City of London, what was then the largest coworking facility in the world.
Kontor has subsequently advised WeWork on more than 600K SF of deals in London, and has completed 2M SF of transactions in total, including helping U.K. firms expand to mainland Europe.
The original thesis of advising startups has held up well, and the company has a roster of more than 300 clients including Monzo, Lyst, Made.com, iZettle, Curve and more established companies like Jaguar Land Rover and Virgin Media Techstars. Its revenue is now around £2.5M ($3.2M). It employs 16 staff in the U.K., with another 10 or so set to be added in London over the next year or so on top of hires in New York.
It sources clients mainly by referrals from its existing startups and venture capital and founders networks, and referrals account for around 95% of its business, according to the company. Kontor also has an online portal for companies looking for flexible office space, and around 80% of its business entails matching clients with flexible office operators.
“Over time, more and more of our clients in the U.K. and mainland Europe were asking us if we could help them set up in New York,” Appleby said. “Never one to turn down an opportunity to visit, we worked with partners out there initially and have already completed a number of deals with some awesome clients. So we’ve tested the market and got proof of concept.
"When we got back and mentioned the idea of setting up in New York full time to a handful of people in our close network, we realised the potential appetite was huge. It really became a no-brainer to make the move.”
Townsend said that the company was hoping to play a part in increasing the flow of U.K. companies heading to the U.S., a path that was not as well-trodden as one might imagine.
“Most small businesses don’t move overseas because of fear of the unknown and the headache of setting up,” Townsend said. “The mechanics of expanding overseas can be quite simple, if you do it right. What’s less simple is deciding your expansion plan, particularly if you don’t have knowledge of the culture or office market where you’re heading. This is where we can come in — we know how to put a strategy into a palatable form for the U.S. market.
“We can help small, growing or established businesses to develop their expansion plans and connect them with the attorneys and so on who can deal with the detail. And, of course, we can find them an amazing office.”
In terms of how the expansion will work in practice, Sutter said that, as the business grows, it will look to hire more staff and implement the practices of the London office, where around half the team work on flexible office solutions. If New York works, the West Coast could be next.
“Over the next 12 months, we’ll focus on integrating our team even more fully into the New York scene," Sutter said. "We already have a close network of partners and we’ll develop this network to make sure we can cover all types of workspace solutions for our clients,” she said.
“Once we have more deals under our belt, we’ll look to hire more team members in New York and implement the same processes as we have here," she added. "Let’s get New York right first. Once we’re fully established there, we’ll look at whether we need to be in other cities in the U.S., such as LA or San Francisco.”