Andreessen Horowitz is betting big on Adam Neumann's return to the real estate startup game.
A16z co-founder Marc Andreessen wrote in a Monday blog post that the firm would partner with Neumann on a new startup called Flow, which is focused on the residential real estate market. Neumann was famously pushed out as leader of WeWork in 2019 after the firm pulled its IPO plans, and his personal and professional antics — padding around barefoot, investing in a wave-pool startup — have provided fodder for books and an Apple TV+ series.
"We think it is natural," Andreessen wrote, "that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes. Residential real estate — the world’s largest asset class — is ready for exactly this change."
While the blog post did not disclose the size of the investment, The New York Times reported it at $350 million at a $1 billion valuation. That deal is the largest individual check a16z has written to a startup, according to the Times. Andreessen will also join Flow's board.
Despite that big check, details on Neumann's new company are sparse. Its website says only "Live life in flow. Coming 2023," with an email sign-up link. Andreessen's blog post hinted that the company's vision is "rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders."
Neumann has been "quietly acquiring majority stakes in more than 4,000 apartments valued at more than $1 billion in Miami, Atlanta, Nashville, Tenn., Fort Lauderdale, Fla., and other U.S. cities," The Wall Street Journal reported in January.
Andreessen wrote that the nation's housing is in crisis. "In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society."
That pronouncement comes a week after The Atlantic first reported that Andreessen had contacted officials in the ultra-wealthy Bay Area town of Atherton opposing a plan to add multifamily housing. Andreessen was among a list of Silicon Valley luminaries fighting against the plan, The New York Times reported.
The size of the check from a16z is sure to raise some eyebrows, especially given Neumann's history. He was ousted from WeWork — which investors once valued at $47 billion — after the firm's failed IPO put his leadership decisions and the company's huge losses under the microscope. WeWork has since gone public through a SPAC and is valued around $4 billion.
A16z earlier this year invested in Flowcarbon, a startup co-founded (but not directly managed) by Neumann that plans to use blockchain technology to track carbon credits.
"We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes by growing from lessons learned," Andreessen wrote.