Ousted WeWork CEO Adam Neumann gets 0 million for new venture

Ousted WeWork CEO Adam Neumann gets $350 million for new venture

Ousted WeWork CEO Adam Neumann gets 0 million for new venture

Andreessen Horowitz has invested about $350 million in Adam Neumann’s Flow housing business, The New York Times reported on Monday, citing three people familiar with the deal.

The investment with the highly regarded company “values ​​Flow at over $1 billion even before it officially opens,” the outlet added.

Adam Neumann co-founded WeWork in 2010 and grew the office leasing company to a staggering $47 billion valuation before being ousted as CEO in 2019.

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

The venture capital world is reacting to the project, particularly criticizing the large check Neumann received when founders of color often struggle to secure 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’s making the same decision himself.

We see sports teams choosing 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 fall in love with the idea that he could start over,” he added.

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

This isn’t Neumann’s first foray into housing. During his tenure as CEO of WeWork, he also attempted to expand into residential apartments with WeLive. He was inspired, as he told investors, by growing up on a kibbutz in Israel, a communal way of life, according to Jewish Currents.

“What started as an office leasing business in Brooklyn metastasized into Manhattan’s largest office tenant, reaching a private market valuation of forty-seven billion dollars, before it all fell apart. in a failed IPO attempt,” the outlet wrote.

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

And Andreessen Horowitz, a high profile venture capital firm that has backed Affirm, Asana and Lyft, has taken a look at Neumann’s latest two ventures, the NYT reported: in what appears to be the next high bet of Neumann, housing.

“Despite all the energy devoted to covering the story, it’s often underestimated that one person fundamentally reimagined the desktop experience and led a paradigm-shifting global company in the process: Adam Neumann,” wrote Marc Andreessen in a blog post explaining why he wants to support the project.

Details are scarce, but the idea is that Flow will be a pseudo property management company that will provide “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 business, the outlet added.

Andreesen’s blog also hints that the company’s goal is to address inequality and housing shortages, which have historically disenfranchised black Americans in the United States, but the way it planned to doing so was unclear.

“In a world where limited homeownership continues to be a driver of inequality and anxiety, giving tenants a sense of safety, community and true ownership has transformative power for our society,” Andreessen wrote.

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

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