Andreessen Horowitz invested $350 million in Adam Neumann’s housing company Flow, The New York Times reported Monday.
The investment made by the highly regarded corporation “values Flow at more than one billion dollars before it ever fully opens its doors,” according to the outlet.
Before being fired as CEO in 2019, Adam Neumann co-founded WeWork in 2010 and helped the desk-rental business grow to a staggering $47 billion valuation.
Sandeep Mathrani, a former CEO of a more established competitor, Brookfield Properties Retail, is the company’s current CEO. Its market capitalization is currently approximately $4 billion.
The entrepreneurial community is responding to the initiative, specifically condemning Neumann for receiving such a sizable check when founders of colour frequently face fundraising challenges, as documented by TechCrunch and the New York Post.
Even while he’s not sure if he’d personally support Neumann, Mac Conwell, the founder and managing partner of RareBreed Ventures, told Entrepreneur that he could understand why a company would back Neumann.
He remarked, “We see sports organisations sign dishonest athletes again and time again. “Your goal as a sports franchise is to triumph. It is your responsibility as a VC to give your LPs money back.”
It’s simple to become mesmerised by the thought of how he might pull this off once more, he continued.
WeWork: Or The Making and Breaking of a $47 Billion Unicorn, a 2021 documentary on Hulu, provided a look back at Neumann’s tenure at WeWork. His time at WeWork was portrayed in the Apple TV+ film WeCrashed, starring Jared Leto and Anne Hathaway.
Neumann has previously ventured into the housing market. With WeLive, he attempted to enter the residential apartment market while serving as CEO of WeWork. According to Jewish Currents, he claimed to investors that his upbringing in an Israeli Kibbutz, a communal living structure, served as his inspiration.
A failed I.P.O. attempt caused the entire operation to collapse, according to the outlet. “What started as a Brooklyn desk-renting outfit metastasized into Manhattan’s biggest office renter, attaining a private-market valuation of forty-seven billion dollars,” the outlet wrote.
According to The Guardian, Neumann received a $445 million settlement when he left the company and sold his WeWork shares, giving him plenty of chances to rejoin the startup scene.
Moreover, prominent According to the New York Times, Andreessen Horowitz, a venture capital firm that invested in Affirm, Asana, and Lyft, has backed Neumann’s most recent two businesses: It oversaw a $70 million capital round for the cryptocurrency business Flowcarbon, and it is currently investing $350 million in housing, which appears to be Neumann’s upcoming high-profile venture.
Marc Andreessen wrote in a blog post about why he wants to support the project, “For all the energy put into covering the story, it’s often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann.”
The concept behind Flow is that it will operate as a sort of fictitious property management business that offers “a branded product with consistent service and community elements,” according to the site. According to the NYT, Neumann also owns more than 3,000 units in Miami, Fort Lauderdale, Atlanta, and Nashville. The outlet further stated that the corporation would include his buildings.
It was unclear how the corporation intended to solve housing inequity and shortages, which have historically excluded Black Americans in the U.S., according to Andreesen’s blog.
Giving renters a sense of stability, community, and genuine ownership has revolutionary power for our society, according to Andreessen. “In a world where limited access to property continues to be a driving force behind inequity and anxiety,” he wrote.
Andreesen attacked the way people are now living, labelling apartment buildings as “soulless.”
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