Expelled WeWork CEO Adam Neumann Gets $350 Million For New Venture

Andreessen Horowitz has invested about $350 million in Adam Neumann’s housing company Flow, The New York Times reported Monday, citing three people close to the deal.

The investment with the acclaimed company “values ​​Flow at over $1 billion before it even officially opens its doors,” the outlet added.

Adam Neumann co-founded WeWork in 2010 and grew the desk rental business to a blazing fast valuation of $47 billion before being ousted as CEO in 2019.

The company now has a market cap of approximately $4 billion and its CEO is Sandeep Mathrani, former CEO of a more traditional player, Brookfield Properties Retail.

The venture world has reacted to the project, especially criticizing the big check Neumann received when color founders often struggle to get funding, as TechCrunch and the New York Post noted.

Mac Conwell, founder and managing partner at RareBreed Ventures, said: Entrepreneur that he could understand why a firm would support Neumann, even if he wasn’t sure he would make the same decision himself.

We see sports teams picking up unethical athletes again and again,” he said. “As a sports franchise, your job is to win. As a VC, your job is to return capital to your LPs.”

“It’s easy to fall in love with the idea of ​​how he could do this again,” he added.

Neumann’s time at WeWork was recounted in Hulu’s 2021 documentary, WeWork: or making and breaking a $47 billion unicorn. His WeWork appointment was also fictionalized in WeCrashedfrom Apple TV+ with Jared Leto and Anne Hathaway.

This is not Neumann’s first introduction to housing. During his time as CEO of WeWork, he also tried to expand into residential apartments with WeLive. He was inspired, as he told investors, by his childhood growing up on a kibbutz in Israel, a communal housing arrangement, according to Jewish Currents.

“What started as a Brooklyn desk rental firm grew into Manhattan’s largest office tenant, reaching a private market value of $47 billion, before the whole thing collapsed in a botched IPO attempt,” the outlet wrote.

Neumann walked away from the company and its WeWork stock with a $445 million payout, according to The Guardian — likely giving him plenty of opportunities to get back into the startup game.

And high-profile Andreessen Horowitz, a venture firm that backed Affirm, Asana and Lyft, has joined Neumann’s last two ventures, the NYT reported: It led a $70 million funding round for crypto startup Flowcarbon, and now the $350 million investment in what appears to be Neumann’s next high-profile gamble, housing.

“Despite all the effort put into storytelling, it is often underestimated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” Marc Andreessen wrote in a blog post explaining why. he wants to support the project.

Details are scarce, but the idea is that Flow will be a pseudo-property management company that “provides a branded product with consistent service and community features,” the outlet wrote. Neumann also owns more than 3,000 apartments in Miami, Fort Lauderdale, Atlanta and Nashville, according to the NYT. His buildings will also be part of the business, the outlet added.

Andreesen’s blog also hinted that the company’s goal is to address housing inequality and shortages, which in the past have disenfranchised black Americans in the US, but it wasn’t clear how it intended to do so.

“In a world where limited access to home ownership continues to be a driver of inequality and fear, giving tenants a sense of security, community and real ownership has a transformative force for our society,” Andreessen wrote.

Andreesen also criticized current housing arrangements, calling apartment buildings “soulless.”

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