The Silicon Valley mega-fund Andreessen Horowitz is reportedly making its single largest investment ever, and the man it’s trusting with that much cash is none other than WeWork co-founder Adam Neumann, who resigned from that business amid an avalanche of criticism in 2019.
Andreessen Horowitz general partner Marc Andreessen announced on Monday that the firm is backing Neumann’s startup Flow and its still-vague plan to build “the future of living” in the residential rental market.
According to sources cited by The New York Times, the firm will invest roughly $350 million into Flow, valuing the startup above $1 billion.
Flow plans to utilize several thousand apartment units Neumann has acquired in recent years to help create “a branded product with consistent service and community features,” the Times said. The business will scale beyond those units as well; according to its website it plans to begin operating next year.
“Our country is creating households faster than we’re building houses,” Andreessen wrote in his blog, adding that low housing supply and urban concentration have “put enormous pressure on rents in the nation’s most dynamic cities.”
Meanwhile, the billionaire said, the trend of remote work has made it harder for some Americans to build relationships in the workplace, creating a big opportunity for startups to foster—and monetize—a sense of community at home.
Andreeseen suggested that Flow’s future tenants will also be able to earn equity in their units, noting that “access to home ownership continues to be a driving force behind inequality and anxiety.”
The latter point was somewhat ironic, considering that the venture capitalist and his wife, Laura Arrillaga-Andreessen, were reportedly outed as extreme NIMBYers earlier this month.
According to The Atlantic, their leafy enclave of Atherton, California, was considering modifying its zoning rules, allowing for a small number of multifamily properties to be built over the next nine years.
The couple apparently went apoplectic. In an email to Atherton’s mayor and city council, they declared that they were “IMMENSELY AGAINST multifamily development!”
“Please IMMEDIATELY REMOVE all multifamily overlay zoning projects from the Housing Element,” the couple allegedly wrote. “They will MASSIVELY decrease our home values, the quality of life of ourselves and our neighbors and IMMENSELY increase the noise pollution and traffic.” (The proposal was ultimately dropped.)
A representative for Andreessen Horowitz said the firm didn’t “have anything to add beyond Marc’s blog post.” A spokesperson for Neumann said that he was unavailable for an interview.
If Neumann succeeds in creating a functional company at Flow, it will mark a dramatic comeback. The entrepreneur co-founded WeWork and scaled it to a mammoth $47 billion valuation, thanks in part to the loose purse strings of Japanese conglomerate SoftBank.
Then, as news of Neumann’s volatile and questionable management style leaked out, including WeWork’s unusual approach to reporting financial metrics, Neumann resigned as CEO and the company called off a plan to go public. (He is nonetheless still worth some $1.4 billion, according to Forbes.)
The company eventually did go public via a SPAC. Its current market value is approximately $4 billion.
In his blog post, Andreessen acknowledged that choppy history, writing that “Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized.”
And, he added, “sometimes accurately.”
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