Former WeWork CEO in talks to boost investment in servicing startup
WeWork co-founder Adam Neumann's family office is in discussions to put additional capital in Peach Street Inc., a startup focused on mortgage servicing.
Neumann's 166 2nd LLC is among a group of investors in talks to take part of a $4 million convertible note, said Ilan Stern, the family office's chief investment officer. New York-based Peach Street is headed by Chief Executive Officer Andrew Wang.
"Andrew is a friend who worked for me for many years and is a world-class investor, operator and person," said Stern, who previously worked for Soros Fund Management. "We are looking forward to supporting them as they grow."
Jefferies Financial Group is also in talks to own part of the convertible note, said people with knowledge of the matter, who asked not to be identified because the discussions are private. Representatives for Peach Street and Jefferies declined to comment.
Peach Street was founded by three friends: Wang, Eric Chiang and Jon Hsu, and named after the street Chiang grew up on in Atlanta, according to its website. The company, which hasn't yet launched, will enable mortgage holders to make payments and access information on a secure digital platform.
Neumann's family office was an investor in Peach Street's $3.2 million seed capital round in July, as was Jefferies, Kairos, Zigg Capital, Soros and serial entrepreneur Kevin Ryan's AlleyCorp. A Soros representative declined to comment.
"Peach Street has the opportunity to take one of the largest and most antiquated sectors in housing and build a product for consumers," Kairos's Ankur Jain, the former head of product for Tinder Inc., said in a phone interview.
New Residential Investment, an affiliate of Fortress Investment Group, also participated in the seed round. Fortress's Michael Nierenberg, who is New Residential's CEO, said the firm made a small investment in Peach Street, which it believes can develop better technology for the mortgage-servicing industry.
Neumann stepped down as WeWork's chairman and CEO last year after the office-sharing company's attempt at a public listing floundered, leaving it little choice but to accept a bailout from Japan's SoftBank. The rescue included the payment of a $185 million consultation fee to Neumann, among other things.
Neumann has backed startups including accomodation and co-working provider Selina, do-it-yourself online platform Hometalk and EquityBee, which connects employees in early-stage companies with investors.