Andreessen Horowitz Backs Adam Neumann’s Real-Estate Startup

Mr. Neumann previously tried to reinvent work by adding a vibrant social community to shared office space as chief executive of WeWork. The company soared to a $47 billion valuation before pulling its planned public listing in 2019 amid mounting concerns over its financial state and Mr. Neumann’s management style. WeWork went public in October and is now trading at a market capitalization of $4 billion.

Andreessen Horowitz’s investment in Flow is a rebuke to Mr. Neumann’s critics, who have painted his highflying approach to running WeWork as a cautionary tale for Silicon Valley’s culture of fast growth and loose corporate governance. Andreessen Horowitz earlier this year also backed Flowcarbon, another startup co-founded by Mr. Neumann that issues cryptocurrencies backed by carbon credits.

Mr. Andreessen cited changes spurred by the pandemic among reasons for the investment, including geographically dispersed workers, reduced in-person interaction and a shift in priorities among workers.

“The residential real-estate world needs to address these changing dynamics. And yet virtually no aspect of the modern housing market is ready for these changes,” Mr. Andreessen wrote in the blog post. “We are excited to partner with Adam Neumann and his colleagues on Flow, which is a direct strike on precisely this problem.”

As a part of the investment, Mr. Andreessen will join Flow’s board, said a person familiar with the matter. Andreessen’s investment and board seat were reported earlier by the New York Times.

Flow is expected to launch its services in 2023, according to the company website, though it hasn’t disclosed details of the business. At WeWork, Mr. Neumann launched WeLive, a planned network of buildings where people could rent rooms in shared, furnished apartments. The company opened apartment buildings in New York and Virginia, but WeLive was shut after Mr. Neumann’s departure from WeWork in late 2019.

Since leaving WeWork, Mr. Neumann has invested in suburban apartments and acquired a large stake in Alfred Club Inc., a company that provides concierge services including picking up and dropping off groceries in residential buildings.

Entities tied to Mr. Neumann have been acquiring majority stakes in more than 4,000 apartments in U.S. cities such as Miami; Atlanta; Nashville, Tenn., and Fort Lauderdale, Fla., The Wall Street Journal previously reported.

In June, Mr. Andreessen and his wife, Laura Arrillaga-Andreessen, wrote a letter to the Atherton Town Council objecting to a new housing-development proposal to allow the construction of multifamily homes in Atherton, Calif., where they own a home. In his post announcing the Flow investment, Mr. Andreessen cited a shortage in housing supply as one of the factors putting pressure on rents in U.S. cities.

Write to Berber Jin at [email protected]