Tech industry reacts to Adam Neumann’s a16z-backed return to real estate

Tech industry reacts to Adam Neumann’s a16z-backed return to real estate

Published August 16, 2022
Views 13

WeWork co-founder and former chief executive Adam Neumann’s career arc has felt synonymous with the rise and eventual fall of unicorn dreams. The entrepreneur, whose fall from grace has attracted global interest, just found a ladder in the form of a check from storied venture capital firm Andreessen Horowitz.

Andreessen Horowitz announced on Monday that it has written its largest single check to-date into Neumann’s new startup, Flow. The stealthy startup is trying to reinvent real estate (again), but instead of commercial properties, which WeWork focused on, Neumann is looking into revolutionizing rental properties. Horowitz’s check, reportedly upwards of $350 million, values the not-yet-launched company at over $1 billion, according to The New York Times. (Andreessen Horowitz declined to comment beyond the blog post, and Flow did not respond immediately to request for comment.) It is unclear how the deal is structured between equity financing or debt financing.

While details remain sparse, the development has met with a range of opinions from early-stage investors, whose entire job it is to back outlier founders with high chances of success. Some say that this is the exact point of the venture asset class — backing bold founders — while others note that Neumann’s second chance comes as women and founders of color struggle more than ever to get starter capital.

Neumann’s track record at WeWork can be viewed differently depending on who you ask. Much has been made of the cultural malaise at the company. Neumann spent investor cash on copious amounts of booze for the office, a school for his wife’s vanity project and a wave pool, but when the business finally imploded ahead of its long-planned IPO, Neumann wasn’t the one left holding the bag.