Workspace Startup Knotel Bags $70M In Series B Funding

Workspace specialist Knotel has obtained a $70M round of funding to further its expansion, which has already been brisk. The total is nearly three times as much as the company raised in a previous round last year.

Since its founding two years ago, Knotel has opened 40 locations in New York, San Francisco and London, totaling nearly 1M SF.

Newmark Knight Frank and The Sapir Organization led the Series B financing round, which included the Wolfson Group, the Moinian Group and Wainbridge Capital.

Last year, the company raised $25M in Series A financing. Investors from that round included Bloomberg Beta, Invest AG, Observer Capital, Rocket Internet and 500 Startups.

Knotel plans to use the new funding to more than double in size this year, adding more locations in its current markets, plus locations in new markets. The company has not specified exactly where the new markets will be.

Over 200 companies use Knotel offices, including Starbucks, financial tech company Stash and game developer King. One reason flexible office space such as Knotel has new appeal is probably a change in accounting standards that will count long-term leases on corporate balance sheets starting next year.

Knotel says it offers an alternative to leasing that is not co-working, providing flexibility but also space customization, thus giving companies the ability to evolve as needed.

“We’re just getting started,” Knotel co-founder and CEO Amol Sarva said in a statement. “Giving companies the freedom of agility has been our mission from the start, and adding these partners to the team is both a validation and gateway.”

Though Knotel characterizes itself as distinct from WeWork, the two seem like serious competitors. Late last year, Sarva claimed WeWork employees entered Knotel locations under the false guise of potential tenants to find out information about tenant rosters.

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