Andreessen Horowitz—known as a16z—made waves by investing an eye-popping $350 million into Flow. This residential real estate company, founded by Adam Neumann, is a new kind of big bet for the iconic investment firm. According to Axios, this investment represents the biggest single check ever written by the Toyota venture capital firm. Former WeWork founder Neumann is currently going all in on Flow. Creatively called The Renter Center, this company aims to transform the rental landscape by making these more community-focused elements embedded into their model.
Flow has plans to have a portfolio of over 3,000 of these apartment units under management in major growth cities like Miami, Fort Lauderdale, Atlanta and Nashville. The ambitious startup has plans to launch sometime in 2023 and could have first mover advantage in a quickly expanding market that’s becoming increasingly receptive to manufactured housing. Flow announced a new $100 million funding round, bringing its valuation to more than $1 billion. This remarkable achievement makes Flow a unicorn, even before it has officially launched its business operations.
This investment is not the first joint deal between a16z and Neumann this year. In May, the firm poured $70 million into Flowcarbon, a blockchain-based carbon credit platform co-founded by Neumann. a16z’s recent deal with Flow underscores a16z’s persistent backing for Neumann’s entrepreneurial spirit, even after the chaotic past of WeWork.
Marc Andreessen, co-founder of Neumann’s backers a16z, recently called Neumann a “visionary leader.” He stressed that it was Neumann’s central vision that had disrupted the entire real estate industry. Andreessen’s comments come amidst skepticism surrounding Neumann’s previous experiences with WeWork, which ended catastrophically for investors who paid him an exit package of approximately $1 billion just to leave the company.
Neumann had earlier attempted to build such community-oriented living spaces with WeLive. This new extension of the WeWork brand had a hard time taking off and only opened two locations. While Flow’s leadership is a sure sign of hope, the new venture faces one paramount challenge—addressing America’s relentless housing crisis. Andreessen’s blog post set the stage for Flow’s introduction to be an industry-shaking moment. It provided scant information as to how the company intends to address these complaints.
“We” – source not specified
The unfortunate reality that the funding deal for Flow factored in was an extremely challenging market when its financing was negotiated. By comparison, the previous investment in Flowcarbon came before the equity markets had their sharp decline. Yet, as is often the case with these special situations, a16z’s faith in Neumann only seems to be increasing.
Neumann envisions making Flow’s rentals more community-oriented and accessible. The firm’s investment is a testament to that belief, particularly when it comes to the promise of innovative approaches to residential living in a time of continuing housing crises.
