US venture capital firm Fifth Wall, which focuses on technologies for the real estate industry, has raised $503 mln (€447.8 mln) for its second proptech fund, more than double the size of its first fund launched two years ago.
Announcing the close on Wednesday, Los Angeles-based Fifth Wall said the oversubscribed Fund II had attracted strong global investor interest, in contrast to Fund I which raised $212 mln in May 2017 from nine strategic real estate investors in the US only.
The latest fundraise brings the firm’s total assets under management to over $1 bn, to be invested in cutting edge start-ups and other innovative tech initiatives. Fifth Wall said its real estate venture capital fund is the largest proptech investment pool to be raised to date and its investor base is the largest consortium of property owners ever assembled.
European investors participating in Fund II include France’s Gecina, Spanish REIT Merlin Properties, and UK firms British Land and Segro. US participants include CBRE, Cushman & Wakefield, Essent, Hines, Host Hotels & Resorts, Hudson Pacific Properties, MetLife Investment Management, Starwood Capital, and Toll Brothers. Kenedix and Mitsubishi Estate in Japan are also taking part.
‘As the real estate and technology industries increasingly converge, Fifth Wall has become central to that convergence, fostering a level of strategic collaboration that has never before characterized the real estate industry,’ said Brendan Wallace, co-founder & managing partner at Fifth Wall.
He added: ‘Fifth Wall sees powerful network effects in our unique fund model as it becomes a centralized platform for the world's largest real estate companies to share insights and access new technologies to enhance their businesses. For our entrepreneurs, Fifth Wall efficiently opens distribution channels for their products to more than 50 corporate strategic investors globally and we have dedicated a team to support the success of those partnerships and integrations.’
Fifth Wall has a nine-person strategic consulting team dedicated to helping its real estate investors address the strategic and operational challenges of new technology adoption and to help structure partnerships, contracts, and distribution deals. The team works closely with its corporate strategic investors to support Fifth Wall’s investments in companies like Opendoor, Lime, Hippo, VTS, and Industrious.
'We’re constantly looking for new real estate services and technologies to improve the way we develop and manage our residential and commercial properties in France,’ said Méka Brunel, CEO of French REIT Gecina. ‘We partnered with Fifth Wall to help us anticipate what’s ahead, and connect us with ideal partners and technologies so we can deliver the best solutions for our customers.’
Brett White, CEO of real estate advisory firm Cushman & Wakefield, said it was partnering with Fifth Wall to help put its clients ‘at the centre of some of the most innovative technology solutions in our industry’.
‘We're committed to identifying and partnering with organizations that can help us develop the next generation of technology solutions for our clients, our colleagues, and the built environment,’ he said.