You may have missed the news earlier in the week, as the anointment of tech unicorns is becoming as ubiquitous as …becoming an actual billionaire. Or more likely, you may not have made the LIC connection. Don’t worry, no one else did, and that’s what we’re here for! Over a decade of experience plumbing the depths of Long Island City, archiving it all and then cross-referencing when appropriate. Quite simply no one else can do what we do for LIC.
Oh yes, that unicorn. It’s called Knotel and it was co-founded in 2016 by Amol Sarva, who’s also the CEO and frontman. Knotel is a workspace provider similar in nature to WeWork, and this week it was announced the company received an additional $400 million in financing at a valuation well over a billion dollars1, the hurdle for unicorn status.
More relevantly, Amol is a long time LIC resident – over 15 years by my count – and a well established presence here. Most tangibly, he developed the 9-story East of East Condominiums at 13-14 Jackson Avenue (47th Rd) back in 2011-12. He also created the now defunct website licnyc.com, which was a source of local information for many years. Finally, he and his wife have been raising their two children in Long Island City, and play a very active role at the Queens Paideia School on 23rd Street.
Anyway, one of the nice things about having a free-ranging blog, is I can use it as a jumping off point for tangential topics – like the upcoming WeWork IPO. Enough has already been written about their S-1 filing (IPO filing), the audacity of which set new standards, or lows. Yet one criticism not mentioned about We is there is no moat, and the Knotel news is confirmation of that. Unlike say Uber, which until Travis Kalanick screwed up was ready to trample Lyft and have a dominant network effect, or Amazon, there’s no way to get a monopoly or even a hegemony. That’s because there’s a relatively easy entry point, at least for a significant number of potential workspace start-ups/investors. And those new companies are the landlords themselves. If the margins for co-working are truly that significant, or potentially so, then what’s to stop a landlord from converting a floor or two of their conventional space into the higher margin product? In fact, in drips and drabs some have already done so around the city. Plus you have Knotel now heavily armed, and long before that Regus (IWG), which is already well ensconced. Between the absurdity of WeWork’s IPO details and Knotel’s zooming past $1 billion so quickly, pardon me for thinking it’s feeling a lot like 1999.
Knotel, Which Says It’s A Steadier WeWork, Vaults to Unicorn Status – conceived and possibly birthed in LIC
Co(ld) War: Why Some Landlords Prefer WeWork And Others Reach For Knotel – Coke v. Pepsi, Uber v. Lyft, and now WeWork v. Knotel
Been There, Done That – a major NYC landlord rolls eyes at WeWork
Amol Sarva – dot.com
Hunters Point Library Announces It Will Open September 24 – as we hinted it would earlier this week. Check out the video of the interior
Works Of All Kinds Shine In LIC Arts Open Show – thru Sept. 6
- more specifically, the company received $400 mil in cash in return for a stake of between 15% and 30%. So for example if it were a 30% stake the other 70% would be worth $933 million putting the total 100% (70% + 30% or $933 mil + 400 mil) at $1.33 billion; if it were $400 mil for a 15% stake then $2.66 bil!?!?! [↩]