Venture capital firm Fifth Wall Ventures announced today it successfully hit its $500 million goal for a second proptech fund. The Opendoor and Blend-backer now has 48 global limited partners across a number of proptech subsectors, giving startups access to some of the industries top builders and management companies.
Fifth Wall Ventures’ first fund was $212 million, with eight strategic partners, and with the new fund, the venture capital firm wanted to build a consortium of partners, rather than a few individual firms.
Brendan Wallace | Photo credit: Fifth Wall Ventures
“There was more that we can learn from a consortium than individual firms,” Brendan Wallace, the founder of Fifth Wall Ventures told Inman. “A lot of the pain points that real estate owners, operators and developers were facing with respects to technology adoption, were common across many different owners.”
With the consortium model, Wallace tells Inman you get a broad survey of which tech trends are of particular interest to the industry. You also build expertise in different subsectors.
“We get a very good vantage point in terms of where is the industry going,” Wallace said.
Among the partners are CBRE, Lennar, News Corp., Toll Brothers and Greystar Real Estate Partners.
Adding 40 more limited partners can also be a boon to the startups that take funding from Fifth Wall Ventures, because it gives them a lane to a number of strategic partners in their field.
“We can go to a real estate tech startup and instead of offering distribution to one strategic [limited partner] in a subsector, we can offer distribution lanes to many [limited partners],” Wallace said.
With the second fund, Fifth Wall Ventures is also taking more of a global aim, with partners in Asia and Europe, including in Japan, Singapore, China and Hong Kong, as well as the United Kingdom, France and Spain.
Fifth Wall Ventures built a consulting advisory team to work with all of the new partners. The consulting team will work with portfolio companies to support integrations, partnerships, purchase orders and contracts that accelerate growth to benefit limited partners.
The companies investment aperture remains the same: It will be focused on Series A, B and C funding rounds, but the size of those checks might change, Wallace said. He said instead of looking to invest between $5 and $10 million, Fifth Wall Ventures will be looking to invest between $10 million and $25 million.
There are a few areas that Fifth Wall Ventures will focus on investing with this second fund. Wallace said they’re looking at energy efficiency and sustainability in building, as well as smart building technology. Fifth Wall Ventures is also looking at blockchain technology for the global real estate market.
When it comes to residential real estate specifically, Fifth Wall Ventures invested in the iBuyer Opendoor, mortgage company Blend, title company States title and homeowners insurance startup Hippo.
“I think both expanding the number of companies we’re invested in around digitizing the home purchase transaction and driving more cooperation between the home building industry and new financial service technologies is going to be a big push for us,” Wallace said.
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