The co-working billionaire has opened a branch of his Andreessen Horowitz-backed co-living startup Flow in Riyadh.
By Iain Martin, Forbes Staff
Adam Neumann’s real estate startup Flow has quietly opened its first properties in Riyadh, the capital of Saudi Arabia. It’s the latest extension of the billionaire’s bid to crack co-living and apartment rentals after WeLive, his previous attempt at real estate, was canned after he stepped down as WeWork CEO. After buying over $1 billion of apartment blocks over America’s sun belt, and raising $350 million from Andreessen Horowitz in 2022, Neumann has outfitted Flow properties with coworking spaces, yoga classes, and hotel-style housekeeping services in an attempt to bring “community” to housing complexes.
Flow Narjis “soft launched” in August, peddling “conscious community” and two- and three-bedroom apartments in a compound in the An Narijis area near Riyadh’s airport. The furnished apartments start from $3,500 a month and showcase Flow’s formula of bundling housing with services like laundry and housekeeping and amenities like pools, gyms and bowling alleys.
A YouTube video shot in August by one of the first residents of Flow Narjis shows a partially completed, and a largely deserted building. The compound with its 238 apartments was built by Saudi construction group Safa; and it appears that Flow retrofitted the building for international tastes by tearing down the walls that traditionally separate male and female areas of the gym in service of a more WeWork boho chic aesthetic. “Flow is designed for everyone. Design changes to the building are to align the building with our brand,” said Flow spokesperson Amy Stevens in a statement to Forbes.
Flow has three properties with close to 1,000 apartments in the Saudi capital with construction slated to finish by the end of the year. Neumann’s startup had bought the properties in partnership with private local investors, according to Stevens. Saudi’s sovereign wealth fund, which backs A16Z, has not invested in Flow, she said.
Andreessen Horowitz’s decision to invest in Neumann’s Flow in August 2022 sparked confusion following WeWork’s infamous implosion from a $47 billion valuation. Neumann tried to mount a bid earlier this year to buy back WeWork after its share price cratered and it filed for bankruptcy protection. But his offer, which would have seen Flow acquire WeWork for $650 million, was rebuffed. Instead, real estate software group Yardi bought the bankrupt startup for just $450 million after striking a deal with WeWork’s lenders.
When Neumann first announced Flow, its business model was something of a mystery. Flow’s job listings touted an “ambitious vision for the future of living” while in Neumann’s speeches it appeared to encompass a mess of ideas extending from crypto-enabled financial services to a nebulous plan for tenants to build equity with their rent. It also posited the idea of renters plunging their own toilets to build “ownership.”
“If you’re in your own apartment, and you bought it and you own it and your toilet gets clogged, you take the plunger,” Neumann explained at A16Z’s American Dynamism Summit in Washington D.C. in November 2023. “It’s the difference from feeling you own something. From being transactional to being part of a community.”
“We looked at residential buildings and said, what if we use technology to operate the systems better, bring people who are all about hospitality…and run an apartment building the way you’d expect the Four Season to run with that level of hospitality,” said Neumann speaking at an event in Saudi Arabia in October 2023. It’s worth noting that branded residences and luxury serviced apartments are hardly a new idea; Four Seasons Residences have been around for more than two decades.
The startup opened its first Flow branded properties in Fort Lauderdale and Miami, Florida, in April with a more modest pitch focused around offering medium to long-term leases at condos with an eco-friendly veneer. Flow’s new website touts its values as “commit,” “grow,” “love” and “oneness.”
The startup also has an app that offers a concierge-style service to buzz in guests and flag maintenance requests to the building super. Both Florida locations are offering tenants a month’s free rent as an incentive, according to the Flow website, a standard way to entice tenants to sign leases for expensive apartments.
Neumann appears to be exporting a similar concept to the kingdom, where he headlined the sovereign wealth fund’s annual “Davos in the desert” summit last year. Flow Narjis last week hosted a “cacao ceremony” (Aztec-themed hot chocolate) combined with a dance class, and yoga classes which provide tote bags emblazoned with the words, “holy shit I’m alive.” “Dive into an art class, nail that yoga pose, or uncover the hidden gems in our beloved city with your new friends,” Flow Riyadh posted on its Instagram account in August.
The WeWork cofounder has a tangled history with Saudi Arabia and its sovereign wealth fund, which has emerged as a major backer of both tech startups and investors over the last decade but remains controversial because of the country’s human rights record and the killing of journalist Jamal Khashoggi.
SoftBank pumped more than $20 billion in equity and debt into Neumann’s WeWork, largely with money from the Middle Eastern kingdom’s sovereign wealth fund — it was one of the main backers of Softbank’s Vision Fund, the world’s largest VC fund. Softbank’s move to double down on WeWork despite massive, mounting losses reportedly led Saudi’s Public Investment Fund to boycott investment in the second Vision Fund (WeWork didn’t respond to a comment request at the time).
Despite this Neumann appeared as a star speaker running a Shark Tank-style competition for startups at last year’s “Davos in the desert” summit in Riyadh. Neumann also hinted last year that he had plans to expand Flow to the kingdom. “Saudi is almost like a startup,” said Neumann speaking at a March 2023 conference with his backers Marc Andreessen and Ben Horowitz. “Saudi has a founder. You don’t call him a founder, you call him his royal highness,” said Horowitz of Saudi’s Crown Prince Mohammed bin Salman.
Flow isn’t Neumann’s first crack at residential property. The Israel-born founder, who grew up on a kibbutz, launched WeWork’s co-living arm dubbed WeLive in 2016 with a similar pitch to Flow: WeLive would provide fully furnished apartments and individual rooms to young adults for short-term rentals. The New York Times reported at the time that WeWork was projecting 34,000 WeLive tenants by 2018, powering a quarter of the startup’s revenues, but the project’s two locations in New York and Virginia were closed shortly after Neumann stepped down as CEO and the company’s plan for an initial public offering collapsed in 2019.
After a boardroom and investor revolt pushed Neumann out of WeWork, the billionaire bought up stakes in apartment blocks with over 4,000 units worth over $1 billion across Florida, Georgia and Tennessee. The WSJ reported the deals were financed using hundreds of millions of dollars Neumann made from sales of his WeWork stock, and a $200 million consulting deal from Softbank Group. Flow’s spokesperson Stevens told Forbes this was false.
The billionaire also invested in a property management startup Alfred but later acquired rival real estate startup Carson, and its technology was integrated into Flow, which is also in the property management game. When Forbes reported the arrangement, Neumann disputed that Flow competed with Alfred but later wrote off his stake in the New York-based startup. “They are not and were not rivals,” Stevens said.
