Venture capital firm Fifth Wall produces a bi-weekly newsletter that curates relevant news articles, summarizes recent deals and provides updates on the various portfolio companies in which they’ve invested.
Check out this week’s update, which covers tiny houses, guest room gyms and the early-stage construction tech startups to watch.
What we’re reading
- “Meet your new landlord: Wall Street” (WSJ): How big investors — including Invitation Homes, which Brad Greiwe co-founded — have transformed suburban neighborhoods by buying up single-family homes and renting them out.
- “Tiny houses: Big future, or big hype?” (Curbed): Whether they serve as accessory dwelling units, Airbnb rentals, vacation homes or rooms for Grandma, “tiny houses” are a trend on the (proverbial) rise, with builders and city planners taking note. And they do look pretty cool.
- “To see the future of renting, watch the college kids” (Bloomberg): Airbnb has normalized the behavior of selecting apartments based on pictures and reviews alone, a practice that is flowing over into the student housing sector.
- “Timeline: Smart home M&A on the upswing” (CB Insights): Smart home exits are on the upswing this year, following a lull in 2016 M&A and funding activity:
- Video: The high cost of free parking (Vox): Antiquated legal code demands a mandatory number of parking spots for office buildings, restaurants and other real estate. This video speaks to how a better system, with more urban development, might be on the horizon.
- “Google is testing vacation rental search in its hotel price-comparison tool” (Skift): Another sign of the short-term rental economy’s growing importance: Google’s hotel booking platform now includes “vacation rental” in its drop-down for “accommodation type.”
- “Is there a real estate solution to e-commerce’s returns problem?” (Forbes): Ordering is easy — returning is hard. E-commerce players are turning to shuttered big-box stores and vacant mall space in an effort to mitigate shoppers’ regrettable returns process.
- “Havelock Wool and 475 High Performance Building Supply join forces to create ‘smart walls’ for healthier spaces” (PRWeb): Havelock Wool, a wool insulation company, has developed a “smart wall” that utilizes technology to generate an airtight, energy-efficient and long-lasting building envelope that delivers healthier air without risk of rot, mold or other health/maintenance concerns.
- “Building momentum: 12 early-stage construction tech startups to watch” (CB Insights): The thing about the “built world” is that we need people to actually build it. Here is a list of 12 companies seeking to make life easier for those who do.
- “Brooklyn apartment building offers co-working space” (WSJ): A massive new Brooklyn multifamily complex, with 25 stories and 714 apartments, also has built-in co-working areas for the growing number of millennials who prefer to work (basically) from home.
- “Hilton’s new design brings the gym to the guest room” (Skift): For those too “lazy” to make it down a few flights to the fitness center, Hilton has introduced a new room concept that makes it easier for travelers to work out privately in their own guest rooms.
- “Amazon is so dominant that even successful retail startups are playing its game” (Mashable): There is a new model for “playing nice” with the vampire squid of e-commerce — Tuft & Needle plans to launch 30 locations by 2020, each prominently featuring the Amazon logo under T&N’s own brand and stocked with Amazon technology throughout.
- Video: This bricklaying robot can build walls faster than humans (HBO): It’s not quite Optimus Prime, but “SAM” can lay bricks at a rate three times that of the average human laborer, offering a glimpse into a future with lower labor costs and more efficient job sites.
Interesting ideas
A selection of relevant financing and M&A activity in our sector
- Hutch Interiors, a Los Angeles-based startup that has developed a home design mobile app, has raised $10 million in funding from lead and only investor, Zillow Group. This new round of financing values that startup at roughly $50 million.
- Traveloka, an Indonesia-based online travel portal, has raised $350 million in equity funding from lead and only investor, Expedia. This new round of financing values that startup at roughly $1 billion.
- LoftSmart, a New York-based site for college students in search of off-campus housing, has raised $5 million in new VC funding. Tribeca Venture Partners led the round with participation from Corigin Real Estate Group and Sterling Equities.
- Cool Cousin, an Israel-based social travel app, has raised $2 million in seed funding from lead and only investor, Elevator Fund.
- FabHotels, an India-based budget hotel brand, has raised $25 million in Series B financing from lead investor The Goldman Sachs Group, with participation from Accel.
- Exporo, a German-based crowdsourcing platform for real estate projects, closes $8 million funding round from e.ventures, Holtzbrinck, Sunstone and BPO.
- SnapTravel, a platform for booking hotel rooms via SMS or Facebook Messenger, has raised $8 million in Series A funding. iNovia Capital led the round and was joined by seed backers Bee Partners, Hedgewood and Lightbank.
- August Home, a San Francisco-based maker of smart locks and other smart home access products, has raised $25 million in Series C funding from insiders Bessemer Venture Partners, Comcast Ventures, Maveron and Qualcomm Ventures.
- Momenta, a Beijing-based developer of autonomous vehicle software, has raised $46 million in Series B funding. NIO Capital, Sequoia Capital China and Hillhouse Capital co-led the round and were joined by Shunwei Capital, Sinovation Ventures, Unity Ventures and Daimler.
- WeWork, a New York-based co-working spaces company, raised $500 million from SoftBank, Hony Capital and others.
- iguazio, an Israel-based continuous analytics platform for big data/IoT, has raised a $33 million series B financing round led by Pitango Venture Capital, with participation from Verizon, Robert Bosch, CME, Magma, Jerusalem and Dell.
- 6 River Systems, a Boston-based startup focusing on robots for warehouse productivity and employee training, has raised $15 million in series A financing from Norwest Venture Partners and Eclipse Ventures.
- Kin Insurance, a Chicago-based company focusing on the online home insurance marketplace, has raised $4 million in funding from Commerce, Omidyar Network, 500 Startups, Chicago, Portag3 and others.
- CommonSense Robotics, an Israel-based company working on micro-fulfillment logistics centers for small businesses, has raised $6 million in seed financing from Aleph VC and Innovation Endeavors.
- WanderJaunt, a San Francisco-based short-term rental property operator, has raised $2 million in seed funding led by Khosla Ventures.
- RedAwning, an Emeryville-based network for vacation property rentals, has raised $40 million in growth equity funding led by Silversmith Capital Partners.
- Jetty, a New York-based provider of home rental financing solutions, has raised $11.5 million in Series A funding. Valar Ventures led the round and was joined by seed backers Ribbit Capital, SV Angel, BoxGroup and Red Swan.
- Darkstore, a San Francisco-based third-party logistics startup, has raised $1.4 million in seed funding from PivotNorth Capital.
- Pro.com, a Seattle-based pricing engine for home improvement projects, has raised $10 million in new VC funding. DFJ led the round, and was joined by Maveron, Madrona Venture Group and Two Sigma Ventures.
- Thomas H. Lee Partners Acquires Majority Interest in Ten-X.
- AccorHotels acquires 49 percent stake in Squarebreak.
- WeWork acquires Spacemob for an undisclosed amount.
Deal spotlight
Redfin’s big week
After pricing its IPO higher than expected at $15 per share, Seattle-based Redfin (NASDAQ: RDFN) surged 45 percent on its first day of trading (July 28), spurred by strong year-over-year growth and bringing the online real estate broker’s market cap to over $1.7 billion.
Redfin’s 2016 revenue was $267.2 million, up from $187.3 million and $125.4 million in 2015 and 2014, respectively. Additionally, investors saw promising signs in 2016’s narrowing losses ($22.5 million in 2016 vs. $30.2 million in 2015).
The strength of Redfin’s IPO was a welcome sight to capital markets after disappointing performances by recent high-profile IPOs, such as Blue Apron and Snap Inc.
Importantly, the Redfin IPO signals the appeal of real estate tech firms to the broader market.
Redfin CEO, Glenn Kelman, has expressed his desire to have the company be the “Amazon of real estate” — a one-stop shop for everything real estate related — and Redfin has already taken steps toward this end with the new introduction of a mortgage origination platform.
This IPO is a strong indicator of things to come for other companies that amplify the built world, and we are thrilled about Redfin’s early successes.
You can learn more about Fifth Wall by visiting its website, and to subscribe to the firm’s newsletter, click here.
