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What’s going on:
Adam Neumann, founder of WeWork, raised eyebrows on Tuesday while speaking on stage at the Fortune Brainstorm Tech conference in Deer Valley, Utah. Neumann stated that his new company Flow “has only two choices: compete, or partner,” with WeWork, according to Fortune.
The official company website says it’s coming soon; however, Neumann has been busy behind the scenes raising tremendous amounts of funding last year, with the New York Times reporting that Flow raised $350 million from venture capital firm a16z.
Fortune reports that Neumann is preparing to launch Flow as a technology-based asset management company that owns and runs buildings. The company will also have a unique value sharing mechanism that will likely be in the form of some type of “fractional ownership” for value creators, according to Fortune.
Why it matters:
Neumann was ousted from WeWork back in 2019 following a failed initial public offering (IPO) attempt. Since then, WeWork has encountered many other challenges including leadership resignations, and a stock value plummet which led the company to face the serious possibility of being delisted from the New York Stock Exchange (NYSE). WeWork closed at $0.26 per share on Tuesday.
It was previously reported by the New York Times that Neumann had approached CEO Sandeep Mathrani before Mathrani announced that he was stepping down from the company. It was reported that they discussed a potential investment and debt buyback. However, the negotiations did not come to fruition and Mathrani decided to pursue debt restructuring as an alternative course of action.
How it’ll impact the future:
Neumann’s decision to re-enter the real estate industry with a new company and new investors could cause a big shake-up in the industry. Flow is doubling down on the hybrid work model that so many companies have been adopting in the post-pandemic economy. Neumann’s bold claims at the Fortune Brainstorm Tech Conference might influence investors within the industry and will likely cause waves in the shared coworking arena.
It’s unclear when Flow will officially launch.
