Today it was announced that venture firm a16z has made a $350 million investment in Adam Neumann's new residential rental company called Flow (which is kind of ironic).
The company is set to launch in 2023 and nobody on the outside seems to be entirely clear on how it plans to revolutionize the multi-family rental market, but supposedly this funding round values Flow at more than $1 billion and supposedly Neumann will be rolling in the 4,000 or so apartments that he has been buying up.
In any event, here's how a16z described the opportunity (I think the key sentence is probably the one about creating a system where renters become like owners):
Only through a seismic shift in the way industry relationships are structured and the mechanisms through which value is delivered can we hope to address the underlying problems of the current system and build the solution. Doing this requires combining community-driven, experience-centric service with the latest technology in a way that has never been done before to create a system where renters receive the benefits of owners. This means rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders. And given the fragmented nature of the ecosystem today, we can only hope to accomplish any of this by bringing every aspect of the living experience together.
What I will say is that I think it's great to see this amount of innovation-focused money flowing into the residential real estate space, which is, after all, the biggest asset class in the world and one that could certainly use some fresh ideas. Apparently it's also the biggest funding round that a16z has ever done.
But I also find a16z's characterization of the problems a bit odd. Renting an apartment is described as this soulless and profoundly lonely experience where you're so ashamed of where you live that you're even hesitant to invite friends over. They also conflate house with home, as if to say that you can't have the latter without the former.
On second thought, maybe these are exactly the right problems to be solving. It is our biases that we need to do something about.
A new Facebook-supported blockchain and cryptocurrency, called Libra, was announced today. The goal: a new global currency. But unlike other cryptocurrencies, this one will be backed by a basket of government-issued securities and other investments.
A new governing body called the Libra Association has also been formed, with its 28 founding members (see above image) contributing both capital (at least $10 million) and expertise. Going forward, they will help shape the network. It's important to note that Facebook will have the same status as all other members of the Association.
Here's an excerpt from today's WSJ:
Facebook said Tuesday the network underpinning the new cryptocurrency would be governed by the Libra Association, an independent, not-for-profit organization based in Geneva. Facebook named more than two-dozen founding partners in that association, including Uber, Visa Inc. and a handful of venture-capital firms and blockchain companies like Coinbase.
The other thing that differentiates Libra from other cryptocurrencies is that when it launches next year (2020), it will do so inside some of the most widely used consumer apps on the internet, including Facebook Messenger and WhatsApp. That translates into somewhere around 2.4 billion active users.
Many within in the industry are already speculating that this could be what finally brings the crypto ecosystem into the mainstream, which is, I guess, why companies such as Visa and Mastercard have already signed on to the project. I am also thrilled to see the Creative Destruction Lab listed above. They are a seed-stage program based out of the University of Toronto.
If you'd like to learn more about Libra, here's the official website and here's a good solid overview by TechCrunch.
Image: Libra
Earlier this week, Union Square Ventures announced that it was leading a Series A investment in an online education marketplace targeted at K-12 students. The platform is called Outschool, and you can think of it as a form of homeschooling.
Today, there about 55 million K-12 students in the US, with around 9% enrolled in private schools. Charter schooling is on the rise (somewhere around 3 million students), but so is homeschooling (similarly around 2.5 million students). Data here.
Homeschooling, at least in the US, largely started within religious groups. But that is starting to change and it is becoming more widely adopted. USV has made a bet that this trend will continue.
If you look at Outschool's model, you'll see that it shares a lot of similarities with other successful internet marketplaces. It is direct-to-consumer (the internet has a way of getting rid of intermediaries). The courses are significantly cheaper than traditional classroom schooling ($10-15 per course). And the supply-side of the marketplace (the teachers) is far more open and accessible to non-traditional participants.
USV gives the example of a human rights lawyer who is teaching on the platform and now earning more than $10,000 per month in additional income. I've never enjoyed online classes, but now that we have reliable video chat, maybe that starts to change.
In any event, where my mind goes with all of this is the impact on our built environment. We are heading toward more flexible spaces and we are doing a lot more from home.