Flexible office startup Knotel has unabashedly claimed it plans to be "bigger than WeWork" by next year, and its latest funding round is expected to position it as the second office space "unicorn."
Wafra, a New York firm backed by the government of Kuwait, is in talks to lead a funding round that would value Knotel at around $1.5B, the Wall Street Journal reports. Knotel has already taken in $160M in funding, and it is unclear how much Wafra or other investors in the round would spend for their stakes at the higher valuation.
If the funding closes — and there is a chance it does not, per the WSJ — Wafra could be joined by Singapore's sovereign wealth fund, GIC. The interest from foreign countries is not new for the coworking space: Softbank's Vision Fund is WeWork's top investor, and half of its funding comes from Saudi Arabia's sovereign wealth fund.
Knotel operates offices in its home city of New York, as well as Los Angeles, San Francisco, Paris, London, São Paolo and Berlin, with more than 200 global locations.
A "unicorn" is generally defined as a company valued by private investors at over $1B.
Knotel does not offer traditional coworking, but builds out custom offices for companies. Its client list includes Netflix, Starbucks and Omnicom Group. WeWork launched a similar offering, HQ By WeWork, last year.
“The biggest companies in the world are way bigger today than they were 10 years ago, or 20 years ago — because technology and globalization has been making them bigger,” Knotel CEO Amol Sarva said on a recent Bisnow's "Let's Have A Drink" podcast. “So the economy is increasingly concentrated with people working in giant companies. And yet [many coworking companies] are building a business that's designed for the two-person dog walking outfit.”
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