WeWork Co-Founder Adam Neumann Wants to Be Your Landlord, Again
Adam Neumann's new housing venture, Flow, has secured $350 million in funding from a big-name investor.
The investment with the much-lauded firm "values Flow at more than $1 billion before it even officially opens its doors," the outlet added.
Adam Neumann co-founded WeWork in 2010 and grew the desk-rental company to a meteoric $47 billion valuation before being ousted as CEO in 2019.
The company now has a market cap of around $4 billion and its CEO is Sandeep Mathrani, former CEO of a more traditional player, Brookfield Properties Retail.
The venture world is reacting to the project, particularly criticizing the large check Neumann has received when founders of color often struggle to get funding, as TechCrunch and the New York Post noted.
THIS IS DISGUSTING.@a16z's largest check going to a (straight white male) founder of one of the most toxic companies we've seen. Firms like this perpetuate over and over again a traditional system that favors a small, homogenous set of founders. https://t.co/PLMKGIULqC— Kate Brodock (@Just_Kate) August 15, 2022
If a startup is worth $1b before it launches a product it's probably a scam.— firstname.lastname@example.org (@Jason) August 15, 2022
Mac Conwell, founder and managing partner at RareBreed Ventures, told Entrepreneur that he could understand why a firm would back Neumann, even if he's unsure if he'd make the same decision himself.
"We see sports teams pick up unethical athletes time and time 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 get enamored 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 The Making and Breaking of a $47 Billion Unicorn. His WeWork tenure was also fictionalized in WeCrashed, from Apple TV+ with Jared Leto and Anne Hathaway.
This isn't Neumann's first foray into housing. During his time as WeWork CEO, he also tried to expand into residential apartments with WeLive. He was inspired, as he told investors, by his childhood growing up in a Kibbutz in Israel, a communal living arrangement, per Jewish Currents.
"What began as a Brooklyn desk-renting outfit metastasized into Manhattan's biggest office tenant, reaching a private-market valuation of forty-seven billion dollars, before the whole thing crumpled in a failed I.P.O. attempt," the outlet wrote.
Neumann walked away from the company and his shares of WeWork with a payout of $445 million, according to The Guardian — likely leaving him with plenty of opportunities to get back in the startup game.
And high-profile Andreessen Horowitz, a venture firm that supported Affirm, Asana, and Lyft, has leaned into Neumann's last two ventures, the NYT reported: It led a $70 million funding round for a crypto startup Flowcarbon, and now the $350 million investment in what appears to be Neumann's next high-profile gambit, housing.
"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," Marc Andreessen wrote in a blog post explaining why he wants to support the project.
Details are sparse, 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 over 3,000 apartments in Miami, Fort Lauderdale, Atlanta, and Nashville, per the NYT. His buildings will also be a part of the company, the outlet added.
Andreesen's blog also hints that the point of the company is to address housing inequality and shortages, which have historically disenfranchised Black Americans in the U.S., but it was not clear how it planned to do so.
"In a world where limited access to homeownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society," Andreessen wrote.
Andreesen also criticized current housing arrangements, calling apartment buildings, "soulless."
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