By Catherine Thorbecke, CNN Business
Nearly three years after Adam Neumann stepped down as CEO of WeWork following a failed attempt to take the company public, he is said to once again be in charge of a billion-dollar real estate startup.
Andreessen Horowitz, the prominent venture capital firm known for its early investments in Twitter and Airbnb, has pumped about $350 million into Neumann’s newest venture, called Flow, according to The New York Times, citing unnamed sources briefed on the deal. The investment valued the startup at more than $1 billion, according to the report.
Representatives for Flow and Andreessen Horowitz did not immediately respond to requests for comment.
In a blog post Monday, Marc Andreessen, cofounder and general partner at the VC firm, announced the investment, without disclosing financial details. He also explained his thinking for backing Flow, a residential real estate company, and Neumann despite the founder’s high-profile fall from grace at WeWork.
“Adam is a visionary leader who revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before,” Andreessen wrote in his post Monday. “Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized — sometimes accurately. For all the energy put into covering the story, it’s often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann.”
It’s not immediately clear how Flow seeks to revolutionize the residential housing industry. Flow currently has a bare bones website, with the slogan “Live life in flow” and two words stating it will launch in 2023.
Andreessen positioned the new company as a long-awaited solution to the nation’s “housing crisis.” He used a mix of jargon-filled terms — “community-driven, experience-centric service” — to explain how the new startup would “create a system where renters receive the benefits of owners.”
“We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes,” Andreessen wrote. “Residential real estate — the world’s largest asset class — is ready for exactly this change.”
Under Neumann’s leadership, WeWork expanded from shared coworking spaces with elaborate perks to experiment with gyms, a school and housing. The last of those efforts, called WeLive, let customers rent a bed or private room in a coliving location, with common spaces available for yoga, ping-pong and more.
Once valued at $47 billion on the private market at its peak, WeWork went through a disastrous attempt to go public, foiled in large part by IPO paperwork that revealed Neumann’s unchecked power and numerous potential conflicts of interest, as well as WeWork’s staggering losses. Neumann ultimately was ousted from his chief executive role at WeWork, but walked away with an exit package reportedly worth hundreds of millions of dollars.
WeWork ultimately went public via a special purpose acquisition company, or SPAC, in 2021. WeWork currently has a market value of about $4 billion.
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