What is Adam Neumann doing now? Former WeWork CEO calls company’s anticipated bankruptcy filing 'disappointing'
NEW YORK CITY, NEW YORK: Former WeWork CEO, Adam Neumann, who has launched a new real estate technology venture named Flow, has expressed his “disappointment” after the beleaguered co-working start-up declared bankruptcy.
The firm, WeWork, which rents out co-working spaces to freelancers, start-ups, and established companies, filed for Chapter 11 bankruptcy protection in New Jersey on Monday, November 6, after suffering a 98% decline in its share price this year.
“As part of today’s filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely nonoperational, and all affected members have received advanced notice,” the company said in a statement.
It has been "challenging" to see WeWork suffer, Neumann said on Monday, expressing confidence that it could “emerge successfully” from a reorganization.
He continued, “As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company’s anticipated bankruptcy filing is disappointing."
“It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully,” Neumann stated in a statement, according to Business Wire.
Why did Adam Neumann leave WeWork?
Neumann, 44, founded WeWork in 2010 and primarily by sheer force of personality, built a real estate conglomerate that peaked in January 2019 at a valuation of $47 billion, as per CNBC. However, in September 2019, he resigned amid criticism for questionable dealings, such as selling the trademark "We" for $6 million in stock.
Around the same time, reports surfaced about the company's hard-partying culture and unconventional managerial style. In one allegedly extravagant incident, Neumann hosted a three-day celebration for 8,000 staff members to commemorate the company's enormous worth, according to Daily Mail.
In 2020, reports also stated that the firm allegedly paid a $2 million cash ransom to a female whistleblower who threatened to reveal an alleged drug culture, co-worker sex abuse, and discrimination at the company.
After Neumann’s departure, the company reportedly withdrew its IPO after investors raised worries over the company's business model. This resulted in a stunning collapse for the company, with its valuation falling to less than $10 billion.
Despite WeWork's difficulties, Neumann's fortune allegedly increased; a sizable amount was amassed when the company was getting ready for an IPO through a special purpose acquisition company (SPAC).
As part of that SPAC process, SoftBank reportedly paid Neumann a reported $480 million for half of his remaining stake in WeWork in 2021.
According to reports, the former CEO also received an additional $185 million as payment for a non-compete agreement and an additional $106 million as a settlement.
What is Adam Neumann’s new venture?
Following his departure from WeWork, Neumann started another real-estate tech venture, called Flow.
The company, valued at $1 billion, received a $350 million cheque from venture capital firm Andreessen Horowitz and committed to addressing inequalities in the rental housing market by fostering a sense of community and assisting tenants in building equity in their houses, as per CNN.
Flow has reportedly built up a portfolio of 3,000 units in major metropolitan areas, with Neumann describing the company’s approach as a “technology-first” venture.
At the surface level, it would seem to be a continuation of Neumann’s approach with WeWork, adapted for the residential market, with the possibility of a financial services arm as well.
