New markets require new approaches and tactics. Experts and industry leaders take the stage at Inman Connect New York in January to help navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.
Venture capital firm Fifth Wall Ventures has closed a massive $866 million fund to focus on technology for all categories of real estate, The Wall Street Journal reported Tuesday.
The fund — the largest of its kind to focus on real estate property technology, according to the company — closed on December 9.
The money is poised to back new and growing technology companies, The Journal reported. Some of those companies, according to Fifth Wall partner Sarah Liu, might include home renovation innovators.
Examples of technology firms innovating how home updates are handled include pre-sale project manager Revive and Eano, which offers bundled room updates and oversight of accessory dwelling unit construction.
Liu also told The WSJ that commercial landlords could be looking to invest in tech that makes office buildings feel more like home, a comment that overlaps with Ernst & Young LLP’s 2022 Future Workplace Index finding office property managers are looking to do exactly that.
At Inman Connect Las Vegas in August, a group of financiers told the audience that now’s the time to invest in proptech, as slower markets provide opportunity, echoing Liu’s remarks.
“We’re in a period of dislocation,” Moderne Ventures’ Liza Benson said. “The public markets have tanked on the tech-side, as we all know, and venture capitalists have accepted that we’re at a point where valuations are coming down, but entrepreneurs haven’t. There’re a lot of things not happening.”
Era Ventures Managing Partner, Clelia Peters, saw 2021’s fundraising market as a frenzy that now needs an outlet.
“We went through this boom period of raising venture capital funds,” she said in Las Vegas. “And we have more venture capital funds and those funds are better capitalized than they have ever been, and that capital is going to need to be deployed.”
The current slowdown in housing isn’t without its benefits, especially for those who have found ways to capture their home equity by first, staying put and secondly, putting it to use. Thus, Liu’s comment about home renovation technologies.
In November, at Inman’s virtual conference series, Connect Now, home equity innovator Eddie Lim said the money at rest in U.S. real estate is tough to comprehend.
“Ironically, in U.S. real estate, there is $28, $30 trillion in home equity out there; it’s the biggest asset class in the world,” he said. Thus, it’s not difficult to see why proptech continues to thrive.
Inman reported on December 7 that financial services startup Setpoint raised a Series A round of $43 million, in which Fifth Wall played role. In August, technology company RentSpree raised a Series B round of $17.3 million.
Fifth Wall is a Certified B Corp, and in keeping with label’s objective, deployed its $500 million Climate Fund to back RoadRunner Recycling, a sustainability-focused recycling company that serves apartment communities and commercial landlords.
Fifth Wall has also backed proptechs Lessen, Veev, Flyhomes, Sundae and Hippo.
Hippo, along with Fifth Wall-backed Opendoor, contributed to the trend of layoffs within the real estate industry.
