We wrote on the closure of flexible workspace provider Knotel co-founder knotel 1b ann azevedotechcrunch earlier this year.
The once-flying firm had just revealed that it had filed for bankruptcy and that investor and commercial real estate agency Newmark would purchase its assets for an estimated $70 million.
For a business that had been valued at $1.6 billion a year before, it was a difficult decline.
Knotel, which had raised around $560 million in investment, found it difficult to pinpoint the precise beginning of its demise. While some claimed the pandemic was the final straw for Knotel, others argued that the proptech was already having problems due to several litigation and evictions that were pending before the outbreak.
Then, over the past weekend, co-founder of Knotel Amol Sarva provided some additional insight into the matter by effectively disparaging Newmark, which had co-led the startup’s $70 million Series B round in 2018.
Sarva notes that the business had reached “almost $400mm of run rate in early 2020, posted gross profit, and even retained more than 2/3 of revenue intact while doing everything we could to guarantee customer continuity and work with landlord partners peacefully” in an email to an unnamed group of employees.
Further, he called Newmark “a stalking horse” that utilised bankruptcy to take over Knotel with roughly $100 million in fresh funding. He claimed that method damaged crucial bonds and “affected lots of customers and partners.”
“I’m shocked that this was the way that was pushed. The procedure made it abundantly clear to me that I would not elect to participate in the new owners’ strategy for moving forward, said Sarva.
The brokerage has hired “a gang of Adam Neuman-era [sic] We Work bros to carry the company forward,” he continued to bash Newmark.
At the time this article was being written, Newmark had not yet replied to a request for comment. Although it is obvious that Sarva is unhappy with how things turned out, it would be intriguing to know precisely when he reached this judgement.
In his capacity as co-founder and CEO of Knote, he did mention that he was returning to the lab where Knotel was first developed.
