Andreessen Horowitz Backs WeWork Co-Founder’s Real Estate Company

Adam Neumann has attracted his largest outside investment since January 2019, when Masayoshi Son’s SoftBank made a $47 billion valuation for WeWork, the office space company he co-founded and now valued at $4 billion.

Andreessen Horowitz, the Silicon Valley venture capital firm, said Monday it had backed Flow, the residential real estate company Neumann has been building since a failed attempt to IPO WeWork prompted him to step down as CEO.

A person familiar with the case said Andreessen Horowitz had invested $350 million at a valuation of approximately $1 billion. By May, it had invested an undisclosed amount in Flowcarbon, another Neumann-backed company trying to make carbon credit markets more transparent using blockchain technology.

In a blog post, co-founder Marc Andreessen praised Neumann as “a visionary leader who revolutionized the world’s second-largest asset class – commercial real estate,” and shook up residential real estate, the only major asset class.

“Only one person has fundamentally redesigned the office experience while leading a paradigm-changing global company: Adam Neumann,” he said.

In a nod to past controversies, Andreessen added, “We are thrilled to see founders who iterate build on past successes by growing from lessons learned. For Adam, the successes and lessons are enough.”

Neumann, who left WeWork a billionaire, has revealed few details about Flow’s plans: The website only lists the words “live life in flow” and “coming 2023.” A spokesman for Neumann declined to comment.

But in an interview with the Financial Times in March, he said he took advantage of the housing supply and affordability crises that forced more young Americans to rent rather than buy.

Seeing “huge opportunities” to provide a greater sense of community in multi-family housing, he said at the time, he focused on cities like Austin, Miami and Nashville, which combine a growing population of young people with job growth, cultural attractions and good health. again.

Andreessen, an early funder of Facebook and Airbnb, gave little detail on how Flow would work, but said it would involve “rethinking the entire value chain, from the way buildings are bought and property to the way residents interact with their homes.” buildings to the way value is distributed among stakeholders”.

After leaving WeWork, Neumann began buying hundreds of millions of dollars worth of affordable rental apartments.

“We started out buying this property, but then I started walking through the buildings just with feeling, and it felt like so much more could be done to make the lives of these tenants better,” he told the FT in March.

Neumann ventured into residential properties with the launch of WeLive, but managed to open only two of his community apartment buildings before leaving WeWork.

Last October, his family office led a $42 million fundraiser for Alfred, which provides tenants with services ranging from picking up their dry cleaners to booking communal yoga sessions.

However, Marcela Sapone, Alfred’s chief executive, said Flow would not use her resident experience company’s product. “This is the Alfred model, but he’ll focus on his buildings,” she said. “His belief is that this will be good for both of us.”

Andreessen attracted widespread attention early in the coronavirus pandemic with a rallying cry to Silicon Valley to put more of its money into creating physical assets.

His essay attacked a “complacent complacency” that he said had led to underinvestment in manufacturing and construction of all kinds, leading, among other things, to “insanely skyrocketing house prices in places like San Francisco, making it nearly impossible for ordinary people to move.” and take the jobs of the future.”

However, earlier this year, Andreessen and his wife, philanthropist Laura Arrillaga Andreessen, attacked a proposal to change zoning regulations in Atherton, Calif., the wealthy Silicon Valley city they live in, to allow for multi-family housing construction, according to The Atlantic. The zoning plan was canceled in July.

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