Fifth Wall Ventures closes a record $1.5B in new funds in 2022 to invest in real estate and PropTech startups
The real estate market is the largest asset class in the United States with investments reaching $43 trillion. The market is expected to grow over the next two decades. Despite the market size, real estate and PropTech startups still struggle to raise funding amid the global economic slowdown. It’s for this reason that Fifth Wall Ventures, the largest and most active investor in real estate tech (PropTech) has launched various venture funds to invest in both early- and late-stage PropTech and climate-related startups.
Today, Fifth Wall announced it closed a record $1.5 billion in new funds in 2022, bringing the firm’s total capital raised to $2.9 billion; the third most of any venture capital firm founded in the last five years. The news comes at a time when property tech startups face higher borrowing costs. The announcement is also a sign that major investors such as Fifth Wall are still bullish on real estate and PropTech startups despite rising interest rates by the Federal Reserve.
The $1.5 billion funds, which represent 64% of capital raised for dedicated PropTech funds, included an $866M Real Estate Tech Fund III, €140M European Fund, and $500M Climate Fund. the firm’s funds represent 64% of capital raised for dedicated PropTech funds. According to SEC Form D filings, Fifth Wall has raised the third-most capital of any venture firm globally ($2.9B) since 2016.
In addition to the $1.5 billion funds, a Fifth Wall affiliate also raised $620M between two SPACs, including FWAA, which completed a merger with the Fifth Wall portfolio company SmartRent in 2021, and FWAC, which announced a merger with Mobile Infrastructure Corporation in 2022.
During the period, Fifth Wall also announced it grew its team to 75 investment professionals across five offices in New York, Los Angeles, San Francisco, and London, and recently opened a Singapore office.
In addition to its PropTech funds, Fifth Wall recently started investing in Climate Tech to decarbonize the global real estate industry, raising $740M across early-stage and growth-stage funds. Separately, the firm launched its climate infrastructure strategy led by Alok Sindher. Fifth Wall is also today’s largest VC fund which is a certified B Corp.
Since the launch of its first $212M fund in May 2017, Fifth Wall has benefited from the explosive growth of PropTech and Climate Tech, which each now represent some of the largest venture capital categories. The firm became an early investor in many successful PropTech companies including Aurora Solar, VTS, and Lessen which recently acquired SMS Assist in the largest PropTech M&A transaction in history.
The firm has invested in six companies that have gone public such as Procore—which recently became an investor in the firm’s Real Estate Tech Fund III—Opendoor, Blend, Doma, Hippo, and SmartRent—which completed a merger with Fifth Wall-sponsored FWAA in 2021. Nine of the Firm’s portfolio companies became unicorns in 2022, including Bilt, Cargomatic, ICON, Material Bank, ONE, SOURCE, Turntide Technologies, Veev, and VTS, totaling more than 25 portfolio companies that have become unicorns since Fifth Wall’s inception.
Fifth Wall was founded in 2016 by Wallace and Brad Greiwe in a Philz Coffee shop in Santa Monica when they were in their early 30s. Since then, Fifth Wall has rapidly expanded internationally with its European Fund, London and Singapore offices, and more than 110 strategic Limited Partners who represent some of today’s largest real estate owners from 15 different countries such as DAMAC (United Arab Emirates), British Land (United Kingdom), MERLIN Properties (Spain), MITSUBISHI ESTATE CO., LTD. (Japan) and NZ Super Fund (New Zealand), among many others.
“Fifth Wall was fortunate to be one of the first venture funds to identify the secular collision between the two largest industries in the U.S., real estate and technology. Because of our consistent track record of investing in category-leading businesses at this intersection, we have been able to meaningfully participate in fiscal as well as strategic value that has been created in what we today call PropTech,” Wallace said.
He also added: “Our position at the driver’s seat in part comes from pioneering a unique model of boasting the largest real estate organizations in the world as our Limited Partners because they are the biggest customers and end-users of the companies that we are investing in.”
“What makes Fifth Wall’s model so powerful is that it delivers specific, differentiated value through its unmatched network of real estate relationships with many of the most influential firms in North America and globally,” stated Max Simkoff, Founder & CEO of Doma, a Fifth Wall portfolio company that acquired North American Title—a subsidiary of Fifth Wall Limited Partner, Lennar—in 2019.