He was once ‘most hated man in America’. Now the founder of WeWork is making a comeback

Andreessen wrote that “we love seeing repeat-founders build on past successes by growing from lessons learned.” For Neumann, he added, “the successes and lessons are plenty.”

Neumann, who has purchased more than 3,000 apartment units in Miami; Fort Lauderdale, Florida; Atlanta; and Nashville, Tennessee; aims to rethink the rental housing market by creating a branded product with consistent service and community features. Flow will own and operate the properties Neumann had bought and also offer its services to new developments and other third parties. Exact details of the business plan could not be learned. (Flow is unrelated to the crypto company Flowcarbon, which was also co-founded by Neumann and raised $US70 million in May in a round led by Andreessen Horowitz.)

It appears Neumann’s business will follow a very different model than WeWork, which involved renting office space on a long-term basis and then re-renting it to clients at higher rates for shorter terms. This created its own risks if WeWork was unable to find renters.

In the case of Flow, the business is effectively a service that landlords can team up with for their properties, somewhat similar to the way an owner of a hotel might contract with a branded hotel chain to operate the property.

The investment thesis for Flow appears to reflect economic and social trends that are driving more people to rent homes rather than buy them at a time when there is a housing shortage. A third of Americans rent their homes, and more than half of Americans living in urban settings are renters.

Neumann made a brief foray into the residential real estate market during his time at WeWork. The company created a division called WeLive that offered short-term rentals and experiences. The business was derided as a social experiment run amok and quickly shut down, one of a few divisions — like WeGrow and Rise by We — that took WeWork away from its core focus. Neumann has said that the company expanded into too many areas too quickly.

“It’s often underappreciated that only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann.”

Marc Andreessen, co-founder and general partner of Andreessen Horowitz

The investment in Flow, while large by venture capital standards, is still far smaller than the $US9 billion that Masayoshi Son, the founder of SoftBank, invested in WeWork with the mandate for Neumann to grow the company as quickly as possible. When WeWork nearly collapsed, Son invested another $US9 billion in the company to shore up its finances, leading to Neumann’s ouster.

Andreessen said in his memo that he was particularly interested in Flow because he believed the rental real estate market was ripe for disruption, especially now that more people are working from home and “will experience much less, if any, of the in-office social bonding and friendships that local workers enjoy.”

He also hinted that the company might try to address one of the biggest challenges renters face: “You can pay rent for decades and still own zero equity — nothing.” He added: “In a world where limited access to homeownership 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.”

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It is unclear whether Flow will offer a rent-to-own program or some other mechanism for renters to create equity. Andreessen and other tech moguls recently opposed a plan for multifamily homes near their estates in the town of Atherton, California.

Neumann declined to comment. In an interview at the DealBook Summit last year, he said of his rise and fall at WeWork that “I have had a lot of time to think, and there have been multiple lessons and multiple regrets.”

This article originally appeared in The New York Times.