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Ousted WeWork founder raises $350m for ‘seismic shift’ in home rental

·2-min read
Adam Neumann WeWork - Mark Lennihan/AP
Adam Neumann WeWork - Mark Lennihan/AP

The founder of WeWork, who was ousted after the office rental company botched a $47bn float, has raised hundreds of millions of dollars for a new “community-driven” startup targeting renters.

Adam Neumann, who founded office sharing startup WeWork in 2012, has raised $350m for new business Flow from Silicon Valley investor Andreessen Horowitz. The deal values the company at about $1bn, the New York Times reported. It has yet to launch.

In a blog announcing the investment, Andreessen Horowitz co-founder Marc Andreessen said Flow would bring about a “seismic shift” for people who rent their homes.

The blog provides few details of what Flow plans to do, but claims the business will “create a system where renters receive the benefits of owners” and give “renters a sense of security.”

Mr Neumann has been buying thousands of properties across the US. He has bought 3,000 apartments in Miami, Fort Lauderdale, Atlanta and Nashville. The New York Times said he plans to group the apartments for rent under a single branded product and offer up community services.

Mr Horowitz said Flow will offer a “community-driven, experience-centric service with the latest technology”.

The business is the most high-profile venture yet from Mr Neumann, who was forced out of WeWork in 2019. He was ousted by the board after a failed attempt to list on the stock market with a valuation of $47bn.

WeWork Adam Neumann - Michael Nagle/Bloomberg
WeWork Adam Neumann - Michael Nagle/Bloomberg

Investors baulked at the company’s huge losses and Mr Neumann’s management style. Reports also detailed alleged drug use and he was criticised for selling shares worth hundreds of millions of pounds in the company before it went public. An arrangement where Mr Neumann bought buildings that were then rented back to WeWork also drew scrutiny.

WeWork, which organised trendy office rentals and co-working spaces, claimed in its pre-float filings in September 2019 that it aimed to “elevate the world’s consciousness” and dedicated the listing to “the energy of We”.

It was ultimately forced to abandon its IPO and later went public at a valuation of $9bn. It has since slumped to $4bn.

The corporate blow-up spawned a TV series, WeCrashed, in which the executive was portrayed by actor Jared Leto.

WeWork Adam Rebekah Neumann - Jose Perez/Bauer-Griffin
WeWork Adam Rebekah Neumann - Jose Perez/Bauer-Griffin

Mr Neumann sued WeWork’s biggest investor, SoftBank, after he was forced out as chief executive before reaching a reported $480m settlement.

In a blog announcing the Flow investment, Mr Andreessen said: “Adam, and the story of WeWork, have been exhaustively chronicled, analyzed, and fictionalized — sometimes accurately.

“We love seeing repeat-founders build on past successes by growing from lessons learned.”

In an interview with the New York Times last year, Mr Neumann admitted to “multiple regrets” from his tenure at WeWork and added the company’s rapid growth “went to my head”.