Silicon Valley woke up to what seemed like a practical joke: Controversial commercial real estate entrepreneur Adam Neumann received $350 million from a16z for a residential real estate startup, Flow. The WeWork founder was the subject of serious criticism, due to gross mismanagement, harboring a toxic work culture, and shady antics that included buying the trademark “We” and selling it back to his company for $6 million. With mounting pressure, Neumann stepped down as CEO of WeWork in 2019 but still owns 10% of the company. Now Neumann is back, and in an a16z blog post, investor Marc Andreessen presented the potential to disrupt the residential rental market. Here’s what we know about Flow.
This is reportedly a16z’s largest check ever. According to the New York Times, this is Andreessen Horowitz’s biggest investment in a single round, with the startup already valued at $1 billion. Critics quickly point out that Andreessen’s concern over the housing crisis comes off as disingenuous since it was recently revealed that the investor opposed a proposal for new housing units in his posh neighborhood.
Flow is already in the works. Neumann purchased more than 3,000 apartment units in Atlanta, Fort Lauderdale, Miami, and Nashville, according to the Times, and will offer Flow’s branded rental-housing experience and services to outside developers.
Flow wants to be a housing utopia for remote workers. Andreessen mentioned workers moving away from the in-person office experience, with Flow offering a community-style living to accommodate the future workforce. It is unclear whether Flow will offer a rent-to-own option for residents.
Neumann tried residential real estate before and failed. Under his leadership, the We brand launched WeLive, co-living spaces in New York and Virginia. The plans to expand to India and Israel quickly shuttered, and in 2019, WeLive became the subject of an investigation by New York City.