NIMBY Marc Andreessen Gives WeWork’s Adam Neumann $350 Million to, Uhh, Solve the Housing Crisis

Despite the spectacular implosion of WeWork, co-founder and former chief executive Adam Neumann has still been able to convince a new crop of suckers—I mean, investors—to give him their money. 

Andreessen Horowitz has signed a $350 million check to Flow, Neumann's new startup that is eyeing the housing market in order to "address" the housing crisis in the U.S., the firm wrote in a blog on Monday. The New York Times reported that this was "the largest individual check Andreessen Horowitz has ever written in a round of funding to a company.”

The blog announcing the investment was written by firm co-founder Marc Andreessen and begins with the declaration that "our nation has a housing crisis." Earlier this month, The Atlantic reported that Andreessen and his wife had filed an all-caps-laden public comment opposing affordable multifamily housing in their town of Atherton, California, which is also the most expensive zip code in the U.S. to live in—and also full of residents just as hostile to affordable housing. 

“Shelter is one of our most basic needs," Andreessen wrote in the announcement blog. "In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society,” Andreessen writes. “When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more and build things. Solving this problem is key to increasing opportunity for everyone.”

Details are light on what Flow actually is, or how it would address the housing crisis. Its website is essentially a blank splash page, but Andreessen writes that it will aim to let "renters receive the benefits of owners," and rethink "the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders."

Andreessen describes Flow as representing Neumann as returning to WeWork's "theme." Under Neumann's tenure as CEO, WeWork was a leader in coworking space rentals. A cursory look at the documents it filed to go public, however, reveals a company that struggled with the notion of financial discipline—profits were nonexistent, hare-brained schemes numerous, and its business model a more inefficient, valuation inflated version of more profitable competitors. If anything, the company’s real innovations were in helping build a playbook for global financial actors (firms like SoftBank and countries like Saudi Arabia) to benefit from the valuation inflation that came with companies self-identifying as “tech”  and, as Matthew Zeitlin wrote in n+1, “to convince workers—whether they’re freelancers or employees of fast-growing companies that can’t build out their own space quickly enough—that they don’t need as much space as they might have thought.” 

Neumann has personally made millions as a landlord, chiefly by leasing properties he had an ownership stake in back to WeWork, The Wall Street Journal reported in 2019. In January, the outlet reported that Neumann had bought majority stakes in more than 4,000 apartments worth over $1 billion in Miami, Atlanta, Nashville, Fort Lauderdale, and other cities across the South.

“Mr. Neumann has told friends and associates of his ambitions to build a company that would shake up the rental-housing industry, say people familiar with the matter,” the Wall Street Journal wrote. “Exactly how he plans to accomplish this goal couldn’t be learned, and his investments so far have largely been in traditional apartment buildings. Mr. Neumann has said he wants to create a widely recognizable apartment brand stocked with amenities, according to a person who was part of these conversations.”

The Flow investment is not the first time Andreessen Horowitz has bankrolled Adam Neumann.

In May, a16z's crypto division led a $70 million funding round for another Neumann startup—Flowcarbon, which bills itself as a "Web3" project that offers a token (Goddess Nature Token). Flowcarbon, which is separate from Flow, states on its website that it "operates at the intersection of carbon and new technology to protect the earth's natural carbon sinks and scale quality carbon reduction and removal projects." If you don’t understand what that means, don’t worry, in a statement to Motherboard, a16z offered to clear things up:

“On-chain carbon credits represent an innovative primitive that can be integrated into the existing DeFi ecosystem as a composable financial instrument and used creatively by web3 builders to come up with new ways to incentivize climate-positive behaviors," the firm said at the time.

Neumann's "innovations" with WeWork weren't socially useful or productive ones, but they did allow for two things: more money to flow into the pockets of VCs and more money to flow out of the pockets of workers. This is a great thing if you work as an investor, but horrible if you work, quite literally, anywhere else. Which the rest of us do. To many, then, news of Neumann plotting a foray into housing is an ill omen.