WeWork rival Knotel just told staff it's looking to raise $100 million as it faces a turbulent office market and a host of unpaid bills

• Knotel is trying to raise $100 million this summer, the company told employees on Monday.
• The flexible-office company will bring in $10 million this week.
• Unpaid bills as well as lawsuits over rent are piling up, Business Insider reported last week. 
• Visit Business Insider's homepage for more stories.

WeWork rival Knotel is looking to raise fresh capital.

The flexible-office company told employees in an all-hands video call on Monday that it would bring in $10 million this week, part of a targeted $100 million fundraising effort that it plans to wrap up by the end of August, an employee who wasn't authorized to speak to the media told Business Insider. 

Investors in this latest funding round were not named. 

A Knotel spokesperson declined to provide additional comment when reached by Business Insider. 

Forbes earlier on Tuesday reported that Knotel was looking to raise up to $100 million, and that the new round could cut the company's valuation in half. Forbes also reported that fundraising talks have been ongoing for several months, and that it was unclear if Knotel would be able to drum up enough interest from investors to close a deal. 

Last August, the company said it raised $400 million in a Series C round of funding and Knotel CEO Amol Sarva implied a valuation of at least $1.3 billion at the time. But $250 million of that money was set aside for buying buildings on behalf of lead investor Wafra. 

Investors in that 2019 funding round included three Japanese investors — Mori Trust, Itochu Corp, and Mercuria Investment Co, as well as returning investors Newmark Knight Frank, Norwest Venture Partners, and New York City real-estate firm Sapir Organization.

The fundraising push comes as Knotel faces both a turbulent office market and a host of unpaid vendors and landlords. 

Some vendors and landlords say they haven't been paid for months, Business Insider reported last week, and lawsuits for unpaid rent are starting to stack up.

Read more: Office-rental startup Knotel bragged it was a nearly profitable anti-WeWork. Now lawsuits are stacking up. 12 insiders reveal what happened to the $400 million Knotel said it raised last year.

A spokesperson told Business Insider in June that Knotel remained on track to be profitable by the end of 2020. The company's leaked first-quarter financials showed a $49 million net loss and up to $84 million in unpaid bills.

Knotel took on empty offices in older New York buildings and in less desirable locations in an attempt to beat WeWork on its home turf, but much of that has been empty for months, former employees have told Business Insider. The company is now trying to shed 20% of its real-estate portfolio, Sarva has said publicly.

On a video panel earlier this month, Sarva said the company's revenue dropped 20% from the first to the second quarter and that Knotel would disclose more information soon.

Read more:

Knotel is facing claims of $230,000 in unpaid rent and construction bills at one Atlanta location, adding to a growing list of legal woes for the flex-space firm

Women-focused coworking startup The Wing is being sued for almost $270,000 in rent and other charges at its Bryant Park location in New York

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READ MORE: Leaked Knotel financials reveal that the WeWork rival had huge pre-pandemic losses and now has more unpaid bills than cash. It's a grim sign for the flex-office space.

SEE ALSO: Office-rental startup Knotel bragged it was a nearly profitable anti-WeWork. Now lawsuits are stacking up. 12 insiders reveal what happened to the $400 million Knotel said it raised last year.

SEE ALSO: Knotel and insurance startup Rhino didn't disclose its CEOs were brothers when it struck a complex financial deal. Now a key partner could be on the hook as Knotel scrambles to pay bills, slashes staff, and plans to shed portions of its portfolio.

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source https://www.businessinsider.com/knotel-aims-to-raise-100-million-in-new-funding-2020-7