Andreessen Horowitz backs WeWork co-founder’s property venture

Adam Neumann has attracted his biggest outside investment since January 2019, when Masayoshi Son’s SoftBank valued at $47bn on WeWork, the office space company he co-founded, which is now valued at $4bn.

Silicon Valley venture capital firm Andreessen Horowitz said Monday it had backed Flow, the residential real estate company Newman Construction since resigning as chief executive of WeWork after a failed attempt to take the loss-making business public. Still working.

A person familiar with the matter said Andreessen Horowitz had invested $350mn. In May, it invested an undisclosed amount in FlowCarbon, another company backed by Newman and his wife Rebekah, which is trying to make carbon credit markets more transparent by using blockchain technology.

In a blog post, co-founder Marc Andreessen praised Newman as “a visionary leader who revolutionized the second largest asset class in the world – commercial real estate” and shook up residential property, which was the only Large property class.

“It is often underappreciated that only one person has radically reshaped the office experience and led a paradigm-changing global company in the process: Adam Newman,” he said.

Referring to past controversies, Andreessen said: “We like to build on past successes while building on lessons learned by repeat founders. For Adam, the successes and the lessons are many.”

Newman, who left WeWork a billionaire, has revealed some details of how Flow wants to change the residential apartment industry: Its website only includes the words “living life in flux” and “the coming 2023.” A spokesman for Newman declined to comment.

But in an interview with the Financial Times in March he said he was tapping into the housing supply and affordability crisis that was forcing more young Americans to rent rather than buy.

He said at the time, he saw “tremendous opportunities” in multifamily housing to provide a greater sense of community, and was targeting cities such as Atlanta, Austin, Miami and Nashville, which offer job growth, cultural attractiveness to young people, and more. add to the growing population. and good weather.

Andreessen, an early supporter of Facebook and Airbnb, echoed Neumann’s argument that the US was facing a housing crisis and that residential real estate was ripe for disruption.

He gave few details of how Flow would work, but said it would involve “rethinking the entire value chain, the way buildings are bought and the way residents interact with their buildings, the way stakeholders.” The value is distributed between”.

After leaving WeWork, Newman began buying multimillion-dollar affordable rental apartments, funding the start-up.

“We started out by buying this real estate, but then I started walking on buildings, just realized, and it felt like a lot more could be done to improve the lives of these tenants,” he told the FT in March. Told.

The WeWork co-founder had forayed into residential property with the launch of WeLive, dormitory-style apartment buildings with common spaces. However, his successors have refocused WeWork on its core office proposition.

Andreessen gained widespread attention at the start of the pandemic and rallied in Silicon Valley to put more of his money into building physical assets.

In an essay entitled It’s Time to Build, he attacked a “smog complacency”, which he said had made little investment in all types of construction and construction, leading to, among other things, “housing in places like San Francisco.” The prices were skyrocketing, making it almost impossible for regular people to move on and take the jobs of the future.”

However, earlier this year, Andreessen and his wife, philanthropist Laura Arillaga Andreessen, agreed to allow the construction of multi-family homes, according to The Atlantic, in the wealthy Silicon Valley city where they live, Atherton, California. attacked a proposal to change the zoning rules in the U.S. The zoning proposal was dropped in July.

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