Ousted WeWork CEO Adam Neumann lands 0 million for startup

Ousted WeWork CEO Adam Neumann lands $350 million for startup

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

The investment with the highly praised firm “values ​​Flow at more than $1 billion even before it 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 fired as CEO in 2019.

The company now has a market capitalization of around $4 billion and its chief executive officer is Sandeep Mathrani, the former CEO of a more traditional player, Brookfield Properties Retail.

The business world is reacting to the project, particularly criticizing the large check Neumann received when founders of color often struggle to get funding, as noted by TechCrunch and the New York Post.

Mac Conwell, founder and managing partner of RareBreed Ventures, said Entrepreneur that he could understand why a company would back Neumann, even if he’s not sure he’d make the same decision himself.

We see sports teams choosing unethical athletes over and over 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 I could do this again,” he added.

Neumann’s time at WeWork was chronicled in the 2021 Hulu documentary, WeWork: or the creation and dismantling of a $47 billion unicorn. His tenure at WeWork was also fictionalized in we crashedon Apple TV+ with Jared Leto and Anne Hathaway.

This isn’t Neumann’s first foray into 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 living arrangement, according to Jewish Currents.

“What started as a Brooklyn desk rental outfit became Manhattan’s largest office tenant, reaching a private market valuation of $47 billion, before it all came crashing down in a failed attempt.” IPO,” the outlet wrote.

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

And Andreessen Horowitz, a high-profile venture firm that backed Affirm, Asana, and Lyft, has leaned on Neumann’s last two ventures, the NYT reported: He 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.

“Despite all the energy put into covering the story, it’s often underestimated that only one person has fundamentally redesigned the office experience and led a paradigm-shifting 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 for Flow to 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. Its buildings will also be part of the company, the outlet added.

Andreesen’s blog also hinted that the company’s goal is to address the inequality and housing shortage, which have historically disenfranchised Black Americans in the US, but it was unclear how it planned to do so.

“In a world where limited access to homeownership remains a driving force behind inequality and anxiety, giving renters a sense of security, community and genuine ownership has transformative power for our society,” he wrote. Andreessen.

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

Leave a Reply

Your email address will not be published.