Here's how Unicorn Workspaces got back on its feet

Unicorn Workspaces has been hit hard by the pandemic. But boss Florian Kosak has found more than one creative way to maneuver through the crisis.

In March 2020, Florian Kosak switched into crisis mode. Within weeks, the managing director of Unicorn Workspaces, which leases a total of 16 office complexes in Germany and two in Portugal, saw sales plummet. "That was brutal, of course, there's no other way to put it," Kosak says. At the same time, the new investors backed out, not wanting to put money into a company in the middle of the crisis that earns its money by renting offices on a large scale and then re-letting them on a small scale.

The coronpandemic has temporarily destroyed the vision of the shared office completely. The large shared spaces with long work desks, with couches and a coffee bar were more threat than respite in the midst of the pandemic. Who went to the office anymore? And who went to one that was shared with dozens of other people?

At Unicorn Workspaces, a quarter of all tenants spontaneously quit - a shock moment and the start of a transition. Instead of constantly expanding, as startups are wont to do, CEO Kosak had to cut costs, cancel projects. "We had to do what no startup is actually good at: Reduce headcount and tweak every set screw to save a little more," Kosak says.

"We had to do what no startup is actually good at: Reduce the number of employees and turn every adjusting screw to save a little bit more."

Florian Kosak, chief executive at Unicorn Workspaces

Part of that is building a new relationship with the landlords. They initially had to forgo rental income, or at least defer it, because that's how the state wanted it and how it was regulated by law. But when this obligation expired, Kosak negotiated. His argument: if we go broke, you get nothing out of it. "That worked," he says. "We then also suited ourselves to a lower rent today and profit sharing in the future," Kosak explains. So if Unicorn Workspaces is doing well, landlords are doing better, a model that was rare until here. "We don't get a cash flow problem this way, and the landlords get a little more margin, which doesn't hurt us."

Kosak is sending its employees on reduced hours, and the company will have to part with a third of them. Because when there is hardly anyone in the office, there is no longer any need for the staff around it. Where there used to be 30 or 40 employees scurrying about, there are now only three or four, the collaboration areas with sofas are closed, only a coffee-to-go is still available from the baristas on site. To that end, Kosak applied for a €800,000 conversion loan through KfW's Pillar 2 funding. All of this stabilized the business, but additional sales are brought by another idea.

The company now makes half of its revenue from a test center

Nine months into the pandemic, Unicorn was building one test center after another. They got the idea earlier. First they tested themselves, then companies asked if Kosak and his team could test employees. In the meantime, they are an official and certified test center at various locations, which brings Kosak additional liquidity. "In the meantime, we make half of the turnover with the test center," says managing director Florian Kosak.

A year later, his situation and that of the team has calmed down. If there were many terminations in the spring, the number of rentals remained stable according to the company and has now leveled off at 64 percent. In fact, only ten percent go to the office on a regular basis, says the founder, the rest pick up the mail every few days. And it was also able to finally close the financing round this week, collecting seven million euros.

"The Stromberg 0815 office is not going to be where people want to come back to"

Florian Kosak, boss at Unicorn Workspaces

In the long run, Kosak and his team are betting that the pandemic, of all things, could play into their hands by making flexible office solutions more attractive. "The Stromberg 0815 office is not going to be where people want to come back to," he believes. The mix of home office and office could become more interesting, while long-term contracts could become less so. Currently, Kosak expects that they will break even again in the summer and can then continue to grow. They then want to abolish the rapid test centre and concentrate entirely on their actual business.