Andreessen Horowitz backs WeWork co-founder’s property venture

Adam Neumann has attracted his largest exterior funding since January 2019, when Masayoshi Son’s SoftBank put a $47bn valuation on WeWork, the workplace area firm he co-founded that’s now valued at $4bn.

Andreessen Horowitz, the Silicon Valley enterprise capital agency, mentioned on Monday that it had backed Flow, the residential actual property firm Neumann has been constructing since a failed try and take WeWork public prompted him to resign as chief government.

One particular person conversant in the matter mentioned that Andreessen Horowitz had invested $350mn at a roughly $1bn valuation. In May, it had invested an undisclosed sum in Flowcarbon, one other Neumann-backed firm that’s attempting to make carbon credit score markets extra clear utilizing blockchain know-how.

In a blog post, co-founder Marc Andreessen heaped reward on Neumann as “a visionary chief who revolutionised the second-largest asset class on the planet — industrial actual property” and stood to shake up residential property, the one bigger asset class.

“Only one particular person has essentially redesigned the workplace expertise and led a paradigm-changing international firm within the course of: Adam Neumann,” he mentioned.

In a nod to previous controversies, Andreessen added: “We love seeing repeat-founders construct on previous successes by rising from classes discovered. For Adam, the successes and classes are loads.”

Neumann, who left WeWork a billionaire, has disclosed few particulars of Flow’s plans: its web site solely options the phrases “stay life in circulation” and “coming 2023”. A spokesman for Neumann declined to remark.

But in an interview with the Financial Times in March he mentioned he was tapping into housing provide and affordability crises that have been forcing extra younger Americans to hire somewhat than purchase.

He noticed “large alternative” to offer a better sense of group in multifamily lodging, he mentioned on the time, and was focusing on cities akin to Austin, Miami and Nashville, which mix rising populations of younger folks with job development, cultural points of interest and good climate.

Andreessen, an early backer of Facebook and Airbnb, gave few particulars on how Flow would work, however mentioned that it could contain “rethinking all the worth chain, from the way in which buildings are bought and owned to the way in which residents work together with their buildings to the way in which worth is distributed amongst stakeholders”.

After leaving WeWork, Neumann started shopping for a whole lot of hundreds of thousands of {dollars}’ price of reasonably priced rental residences.

“We began by shopping for this actual property, however then I began strolling the buildings, simply feeling, and it felt like there’s a lot extra that may very well be carried out to make these tenants’ lives higher,” he informed the FT in March.

Neumann had ventured into residential property with the launch of WeDwell, however managed to open solely two of its communal condominium buildings earlier than leaving WeWork.

Last October his household workplace led a $42mn fundraising for Alfred, which gives tenants companies starting from accumulating their dry cleansing to reserving communal yoga periods.

Marcela Sapone, Alfred’s chief government, mentioned nevertheless that Flow wouldn’t be utilizing her “resident expertise” firm’s product. “This is the Alfred mannequin, however he’ll be specializing in his buildings,” she mentioned. “His perception is that is going to be good for each of us.”

Andreessen attracted widespread consideration early within the coronavirus pandemic with a rallying cry to Silicon Valley to place extra of its cash into creating bodily belongings.

His essay attacked a “smug complacency” that he mentioned had led to under-investment in manufacturing and building of all types, main amongst different issues to “crazily skyrocketing housing costs in locations like San Francisco, making it almost not possible for normal folks to maneuver in and take the roles of the long run.”

However, earlier this 12 months Andreessen and his spouse, philanthropist Laura Arrillaga Andreessen, attacked a proposal to vary zoning guidelines in Atherton, California, the rich Silicon Valley city the place they stay, to permit the development of multifamily houses, in response to The Atlantic. The zoning proposal was dropped in July.

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