Why did one of many biggest tech buyers give $350 million to a startup headed by WeWork’s disgraced founder?
WeWork’s well-known implosion may seem to be a PR nightmare that will be not possible for an govt to get better from, spawning each a TV collection and documentary that chronicled the workplace leasing firm’s failure.
On Monday, that assumption proved false when billionaire Marc Andreessen introduced plans for a serious funding in Movement, a brand new actual property firm by WeWork founder Adam Neumann.
That funding is claimed to be price $350 million, according to reporting by the New York Times, and represents the most important single funding that Andreessen’s enterprise capital agency, Andreessen Horowitz, has ever made. The billionaire’s funding historical past consists of early stakes in tech giants like Fb-parent Meta, Twitter, and Skype—that means that his assist of Movement has critical weight.
The newest funding set Movement’s valuation at over $1 billion.
WeWork collapsed in 2019, falling in worth from over $40 billion to only $4 billion at present after a complicated initial public offering. Because it sputtered, the corporate, which aimed to revolutionize office tradition by way of subleased coworking areas, ousted Neumann as CEO.
Andreessen made his announcement about investing in Neumann’s newest firm in a blog post on his firm’s website on Monday, citing the necessity for funding in innovation within the U.S. actual property sector. “The demographic tendencies driving America’s housing market are not possible to disregard: Our nation is creating households quicker than we’re constructing homes,” the submit begins.
Although exact particulars about Movement’s enterprise and mission are scarce, Andreessen implies that it goals to disrupt perceived dangerous developments in how People at the moment work and stay. The corporate is expected to launch next year.
Neither homeownership nor renting are at the moment capable of meet most individuals’s wants, wrote Andreessen in his submit, a predicament that COVID made extra difficult. “In consequence, [people] will expertise a lot much less, if any, of the in-office social bonding and friendships that native employees take pleasure in,” he wrote concerning the rise of working from dwelling. Presumably, Movement is supposed to treatment these dynamics.
In his submit, Andreessen additionally addressed Neumann’s previous failure with WeWork. “We perceive how tough it’s to construct one thing like this and we love seeing repeat-founders construct on previous successes by rising from classes discovered,” he wrote. “For Adam, the successes and classes are loads, and we’re excited to go on this journey with him and his colleagues constructing the way forward for residing.”
By specializing in structural issues within the American housing market, Monday’s funding announcement echoes a post Andreessen wrote in 2020 known as “It’s Time to Construct” through which he advocated for a rise in housing tasks within the U.S.
“We will’t construct almost sufficient housing in our cities with surging financial potential—which ends up in crazily skyrocketing housing costs in locations like San Francisco, making it almost not possible for normal folks to maneuver in and take the roles of the longer term,” he identified. The answer, he wrote, is to construct extra housing: a mindset colloquially often called YIMBY, or “sure in my yard.”
Earlier this month, The Atlantic revealed that Andreessen does not actually adhere to that philosophy. The publication uncovered public paperwork exhibiting him and his spouse opposing the creation of multifamily dwelling models near the place they stay in Atherton, Calif. The city has been named the richest zip code within the U.S. for five consecutive years.
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