Adam Neumann attracted his largest outside investment since January 2019, when Masayoshi Son’s SoftBank valued WeWork, the office space company he co-founded, which is now valued at $4 billion, at $47 billion.
Andreessen Horowitz, the Silicon Valley venture capital firm, said Monday that it has supported Flow, the residential real estate company that Neumann is building, since a failed attempt to take WeWork public led to his resignation as chief executive.
A person familiar with the matter said Andreessen Horowitz had invested $350 million at a valuation of around $1 billion. In May, it had invested an undisclosed sum in Flowcarbon, another Neumann-backed company trying to use blockchain technology to make carbon markets more transparent.
In a blog post, co-founder Marc Andreessen hailed Neumann as “a visionary leader who revolutionized the world’s second largest asset class – commercial real estate” and would rock residential real estate, the only major asset class.
“Only one person has transformed the office experience while leading a paradigm-shifting global company: Adam Neumann,” he said.
Alluding to previous controversies, Andreessen added: “We love it when repeat founders build on past successes by growing from the lessons learned. For Adam, the achievements and lessons are plentiful.”
Neumann, who left WeWork as a billionaire, has provided few details about Flow’s plans: His website only says 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 was taking advantage of housing and affordability crises that were forcing more young Americans to rent rather than buy.
He saw a “tremendous opportunity” to bring a greater sense of community to multifamily housing, he said at the time, targeting cities like Austin, Miami and Nashville that combine growing populations of young people with job growth, cultural attractions and good weather.
Andreessen, an early supporter of Facebook and Airbnb, gave few details on how Flow would work, but said it would “involve a rethinking of the entire value chain, from the way buildings are bought and owned to how it is built.” to the way occupants interact with their buildings and the way value is distributed among stakeholders”.
After leaving WeWork, Neumann began buying hundreds of millions of dollars worth of affordable rental housing.
“We started buying these properties, but then I walked through the buildings, just got this feeling and it felt like there was so much more that could be done to improve the lives of these tenants,” he told the FT in March.
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Neumann had ventured into residential construction with the launch of WeLive, but was only able to open two of his residential buildings before leaving WeWork.
Last October, his family office ran a $42 million fundraiser for Alfred, which offers renters services ranging from picking up their dry cleaners to booking yoga sessions together.
However, Marcela Sapone, Alfred’s CEO, said Flow would not use her Resident Experience company’s product. “That’s the Alfred model, but he’s going to focus on his buildings,” she said. “His belief is that this will be good for both of us.”
Andreessen garnered a lot of attention early in the coronavirus pandemic with a call for Silicon Valley to put more money into tangible asset creation.
His paper attacked a “smug complacency” that he says has led to underinvestment in manufacturing and construction of all kinds, which among other things has led to “insanely skyrocketing real estate prices in places like San Francisco, making it almost impossible for ordinary people to move in and take on the jobs of the future.”
Earlier this year, however, Andreessen and his wife, philanthropist Laura Arrillaga Andreessen, attacked a proposal to change zoning rules in Atherton, California, the affluent Silicon Valley town where they live, to allow for the construction of apartment buildings, according to TheAtlantic. The development plan was dropped in July.