Friday Funding: Adam Neumann Bags Upwards of $350 million From Andreessen Horowitz
Going with the Flow
Adam Neumann snagged upwards of $350 million for his new company, Flow, from venture capital firm Andreessen Horowitz. Neumann is known for founding WeWork (WE) which he exited after a botched 2019 IPO. He is now setting his sights on residential real estate. With Flow, he plans to build 3,000 apartments in four southeast cities: Miami, Fort Lauderdale, Atlanta, and Nashville, beginning in 2023.
Andreessen Horowitz executives contend Neumman’s efforts running WeWork were “often under appreciated.” They specifically mention his vision of a “new way to work.”
Residential Real Estate Needs Supply
Given the current supply shortage in the housing market, new inventory could be welcome news for many. In the meantime, market conditions have pushed prices for both home purchases and rentals sky-high.
As labor, financing, and input costs have risen, many homebuilders have been sitting on the sidelines, further reducing supply. Rising mortgage rates have squeezed out many would-be homebuyers, forcing them to rent instead. These trends have created a supply-demand imbalance, putting property owners in the catbird seat. All this to say, Americans shopping for housing could use some good news.
Hope for House-Hunters
While the details on how Flow will operate are still scant, Andreessen Horowitz suggested there may be a rent-to-own feature. Additionally, the startup is expected to offer a model that provides operational efficiencies to the landlords it contracts with.
Over time, those frustrated with the housing market may start to welcome creative solutions. As some find suitable housing an elusive American dream, Neumann’s visionary leadership could potentially help keep hope alive.
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