Why Is Marc Andreessen Backing WeWork’s Founder Adam Neumann?

Neumann’s new endeavor, Flow, seeks to solve the US housing crisis through the community concept WeWork was based on

El ex CEO de WeWork, Adam Neumann
August 15, 2022 | 03:22 PM

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Bloomberg Línea — WeWork’s founder Adam Neumann has just raised US$ 350 million, according to Bloomberg News. But for a new venture. And Marc Andreessen, the billionaire venture capitalist from a16z, is boarding on his new idea.

“There’s a reason the federal government started subsidizing home mortgages: someone who is bought into where he lives cares more about where he lives. Without this, apartments don’t generate any bond between person and place and without community, no bond between person to person,” Andreessen wrote in a blog post on Monday, explaining why he is investing in Adam Neumann’s new startup, Flow.

The concept of community was something that Neumann decided to bring when he build WeWork. Before that, Neumann was already an advocate for shared spaces, as he was born in an Israeli kibbutz.

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The investment will be the largest check issued for a single round of support in the history of the a16z fund, according to the New York Times.

There aren’t many details about Flow’s business model, just that the company seeks to solve the US housing crisis. According to Bloomberg News, Neumann has purchased thousands of residential units in Atlanta; Fort Lauderdale, Florida; Miami; and Nashville, Tennessee, where he plans to operate as an owner.

The startup is unrelated to Flowcarbon, another startup Neumann helped start that specializes in selling blockchain carbon credits, said a person familiar with the matter.

“Adam is a visionary leader who revolutionized the second largest asset class in the world — commercial real estate — by bringing community and brand to an industry in which neither existed before. Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized – sometimes accurately. For all the energy put into covering the story, it’s often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” wrote Andreessen.

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“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. For Adam, the successes and lessons are plenty and we are excited to go on this journey with him and his colleagues building the future of living.”

Andreessen also says he thinks it is natural 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.”

a16z role in Latin America

Recently, a16z has been backing Mexico’s unicorn Jeeves, and Brazil’s Inventa. In April, a16z’s Angela Strange told Bloomberg Línea that the whole premise of a16z is that software is eating the world, meaning every single industry is going to be in software. “We see that across all industries. In Latin America, software eating the world is literally just getting started,” she said, citing Nubank’s driving the gap for the unbanked population in Brazil.

For her, software, allied with banking services is a “very large opportunity that exists in Latin America”. Three years ago, a16z invested in Colombia’s fintech Addi, a Buy Now, Pay Later fintech, and is still backing fintech entrepreneurs like Gaston Irigoyen, from Argentina’s infrastructure fintech Pomelo.

“We are bullish on technology helping consumers in the region, regardless of economic policy. The question is does the regulation provide a tailwind or a headwind? It very much depends on the country,” she said, adding that Brazil has a clever regulation with open banking, fostering competition.

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Strange personally likes to invest in infrastructure fintechs in their very early stages. “I joke that every company will be a fintech, but actually every fintech will spin off as infrastructure. In the US infrastructure is relatively easy but distribution is difficult. In LatAm, it’s the opposite.”

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