Adam Neumann Says 'He Learns From His Mistakes' As He Shows Off New Startup After WeWork's $47 Billion Collapse
Former WeWork Inc. CEO Adam Neumann is back with the launch of his new startup Flow.
The vertically integrated real estate company focuses on redefining luxury living, targeting upscale renters with a mix of wellness, fitness and coworking amenities. Its facilities boast resort-style cabanas, a tanning bay, a skyline clubhouse with an entertainment center, a yoga lawn, a multilevel coworking lounge and an outdoor theater.
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Flow is operating in Miami and Fort Lauderdale, Florida, where one-bedroom apartments are priced at $3,014 and $2,631 per month, respectively — significantly higher than the local average costs of $2,060 in Miami and $2,185 in Fort Lauderdale, according to Apartments.com.
Additionally, Flow has expanded its portfolio by acquiring thousands of residential units in Atlanta and Nashville, Tennessee, but those aren't available yet.
Backed by top-tier investors like Andreessen Horowitz (a16z), Flow has secured $350 million in funding, pushing its prelaunch valuation to $1 billion.
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Despite the skepticism that many have about Neumann's ability, Marc Andreessen, co-founder of a16z, has expressed support for his new direction. A16z is one of the top venture capital firms in the world, investing in some of the most innovative startups in globally. Investments in Flow and other startups highlight the lucrative yet volatile nature of high-risk, high-reward startup investing.
"We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes. Residential real estate — the world's largest asset class — is ready for exactly this change," Andreessen said in a release on the a16z website.
In a recent interview with CNBC, Neumann shared his enthusiasm about having both Andreessen and Ben Horowitz on Flow's board.
"I'm so lucky to have Marc Andreessen and Ben Horowitz as my partners. They both come to my board meetings and my board room is exciting," Neumann said. "Debate is an understatement, there are lively discussions that can go all over the place."
After the tumultuous chapter at WeWork, where Neumann’s leadership faced significant scrutiny following a highly publicized and failed public offering, Neumann appears eager to apply the lessons he’s learned to make Flow a success.
Unlike his experience at WeWork where everything was rushed, Neumann says this time, he's learned from his previous mistakes and took the time to build the operations, processes and technology before launching.
As Neumann steps forward with Flow, only time will reveal whether this venture will mirror the fate of WeWork or carve out a successful niche in the market.
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