Andreessen Horowitz (a16z) appears decided to maintain the capital flowing to controversial WeWork founder Adam Neumann. The storied enterprise agency wrote its largest particular person test ever, at $350 million, to Move, Neumann’s new residential actual property firm targeted on leases, the New York Times reported today.
The funding spherical values Move at over $1 billion, making it a unicorn earlier than it even commences operations, which it plans to do in 2023, in line with the Instances. The startup is ready to function over 3,000 condo models Neumann has bought in Miami, Fort Lauderdale, Atlanta and Nashville as a part of its imaginative and prescient to carry community-oriented options to the rental market, the Instances added.
In a blog post on a16z’s website today, Marc Andreessen described Neumann as a “visionary chief” and credit him with “revolutionizing” actual property. Andreessen’s put up didn’t tackle any of the monetary phrases of the funding.
The funding marks a16z’s second present of help for a Neumann-founded firm this yr: In Could, the agency put $70 million into the entrepreneur’s blockchain-based carbon credit platform, Flowcarbon, which seems to don’t have any relation to Move moreover its shared co-founder. Curiously, Andreessen’s weblog put up right this moment calls Move Neumann’s “first enterprise since WeWork,” though he’s listed as a co-founder of Flowcarbon in a16z’s earlier put up about that funding.
“We perceive how troublesome it’s to construct one thing like this and we love seeing repeat-founders construct on previous successes by rising from classes realized,” Andreessen wrote in right this moment’s weblog put up, implicitly referring to Neumann’s time at WeWork.
WeWork’s try at an IPO underneath Neumann (keep in mind community-adjusted EBITDA?) was so calamitous that its Silicon Valley and Wall Road traders ended up paying Neumann an infinite exit bundle, price ~$1 billion, simply to go away the corporate.
Neumann managed to get that good-looking payout regardless of that underneath his reign, the corporate tanked in worth from ~$47 billion to ~$8 billion and gained a repute for mismanagement and poor remedy of workers.
All through Neumann’s tenure, missteps abounded. He famously trademarked the “We” brand and sold it back to his own company for almost $6 million, although he ended up returning the cash to the corporate after this association was revealed through the firm’s IPO try and subsequently lambasted by traders and the general public.
After Neumann burned traders’ money on copious amounts of booze for the office, a school for his wife’s vanity project and a wave pool, it’s considerably stunning to see Silicon Valley coming again for seconds. a16z’s cope with Flowcarbon could nicely have been negotiated earlier than the rout within the fairness markets however its cope with Move introduced right this moment doubtless was not, that means right this moment’s deal is an excellent greater signal of the investor’s confidence in Neumann’s management amid broadly troublesome market circumstances.
To make certain, WeWork’s strategy to co-working areas was prescient in a pre-pandemic world, whatever the firm’s different controversies. As distant work rises in reputation, there could be an amazing alternative in constructing group amongst renters — an concept Neumann has been eager to pursue for years. He took a go at this idea earlier than with WeLive, a set of residential communities he deliberate to construct underneath the WeWork model that fizzled out after opening just two locations.
In his weblog put up right this moment, Andreessen mused at size about how Move is poised to resolve the nation’s housing disaster, writing that “restricted entry to dwelling possession continues to be a driving pressure behind inequality and anxiousness,” although particulars within the put up about precisely how Move will got down to obtain this have been scant.
At present’s funding in Move comes simply after studies surfaced that Andreessen fought against a proposal to construct new inexpensive housing models in his ultra-wealthy hometown of Atherton, CA.
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