PitchBook News - Adam Neumann's big pitch

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The Weekend Pitch

August 21, 2022

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(Michael Kovac/Getty Images)

Welcome back to the Weekend Pitch. I'm James Thorne and I can't stop thinking about Adam Neumann. What did he say to land a billion-dollar valuation from Andreessen Horowitz for his new real estate venture, Flow? And what was Marc Andreessen's justification for backing one of the most controversial founders in the world?

(Pet theories are welcome. You can send them to me at james.thorne@pitchbook.com or on Twitter @jamescthorne.)

For now, all we can do is imagine; Flow has a bare-bones website and a16z's announcement was fuzzy on details.

Critics and hot-takers weighed in this week after a16z announced its investment in Flow, reportedly $350 million. Neumann was dragged as yet another man who fails upward. Comparisons were drawn to Sean Parker, who leapt from Napster's music piracy debacle into a fledgling Facebook. Those who dared defend WeWork—"It had a $4 billion exit!"—were reminded that the office leasing startup raised more than $10 billion and was once valued at $47 billion.

Marc Andreessen was caught in the critical crossfire, following headlines earlier this month about his stance against multifamily housing development in his own community. (He wrote in a public comment, since removed from the web, that he was "IMMENSELY AGAINST" rezoning efforts in the ultrawealthy town of Atherton, Calif.)

Flow could be just another honest crack at real estate tech, but it also portends a revival of the weirdness of WeWork with its yogababble, tortured branding and dubious promises of tech disruption.

Quote/Unquote

(cosmaa/Shutterstock)

"There is a lot of pressure building up at the late stage, where a lot of companies need to raise some form of financing so that they can continue operating until they are able to get to the public market, and that capital is not available in equity markets."

—Kyle Stanford, a senior analyst at PitchBook, on how startups are tapping the debt market to buy time before embarking on a new equity round.

Deal flow

(Guschenkova/Shutterstock)

The HR tech vertical has seen consistent growth in investor interest since mid-2020, reaching a record quarterly global deal value of $4.3 billion in Q2 2022, according to PitchBook data.

One sector that is gaining traction within the vertical this year: marketplaces for nurses, which are trying to help solve the shortage of medical staff by matching healthcare workers with hospitals.

Did you know ...

… That equity crowdfunding platform Seedrs has launched a new venture partner program to support European founders?

The program is intended to help VCs, accelerators, operators and founders pool expertise and networks with a greater emphasis on providing mentorship and operational support to startups.

Datapoints

(StockStyle/Shutterstock)

The increasing digitalization of financial services has benefited fintech startups in recent years. And as consumers moved online during the pandemic, the trend only sped up, driving demand for everything from digital payments to checkout platforms and corporate credit cards.

Explore our fintech market map to see where investors are putting their money.

Recommended reads

Jennifer Doudna, one of the scientists who won the Nobel Prize in chemistry for research on CRISPR, on the ethical ramifications of gene-editing tech and how it may be put to use. [The New York Times]

Acquisitions are a much more common endpoint for startups than IPOs, so why does no one talk about them? One writer's thoughts on why founders are afraid to talk about exit strategies. [Harvard Business Review]

Wall Street's banks are setting up direct lending funds as they fight to regain the ground they've lost to private credit powerhouses like Blackstone and Ares. [Bloomberg]

For the developing world, refrigeration means growth. In Rwanda, it could spark economic transformation. [The New Yorker]

Climate change is generating a vicious cycle of droughts and flash floods as dry soil struggles to absorb water from rainfall. [Wired]

How private equity firms poach C-Suite talent from public companies. [Institutional Investor]

This edition of The Weekend Pitch was written by James Thorne and Priyamvada Mathur. It was edited by Chris Noble and Sam Steele.

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PitchBook News - Adam Neumann's big pitch

Quote/Unquote

Deal flow

Did you know ...

Datapoints

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