Fifth Wall has raised $866 million for its latest proptech fund, the largest-ever dedicated venture fund of its kind and a shot in the arm for a sector that’s been hit hard by rising interest rates.
As with its earlier funds, including a climate tech fund and two proptech funds, Fifth Wall raised the money from a host of industry giants, including CBRE, Equity Residential, Invitation Homes and Cushman & Wakefield. Overall, the firm has over $3 billion in capital under management, the Wall Street Journal reported.
Co-founded in 2016 by Brad Greiwe and Brendan Wallace, Fifth Wall’s previous proptech investments include Opendoor, VTS, Blend, Hippo and Doma. As early investors, Fifth Wall had a lot of success with those bets, many of which found exits in the public markets. The fate of those startups in the public markets, however, has been decidedly less rosy: Stock prices of many of them are down up to 90 percent and they’ve been laying off large chunks of their workforce in an effort to get to profitability. Title insurer Doma, for example, just laid off 40 percent of its workforce.
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Opendoor shares have fallen 90 percent this year, and its CEO just stepped down, while insurance tech firm Hippo’s shares are down 80 percent. SmartRent, a smart-home tech company Fifth Wall took public via SPAC merger, is down 73 percent.
“I don’t think we regret anything, because a lot of the decisions that a lot of our portfolio companies made were the right ones for the time,” Greiwe told The Real Deal in October, speaking of the turmoil in proptech.
Proptech startups raised a record $12.2 billion in venture funding last year, according to CB Insights, up 34 percent from the previous peak in 2019. This year, funding across the sector has slowed considerably, though Fifth Wall told the Journal it raised more than half the money for its latest fund in 2022.
In March, Fifth Wall was forced to abandon plans to raise $150 million by taking a second real estate fund public through a SPAC, as the larger SPAC market fizzled out. In July, the company announced it had raised $500 million for its climate-tech fund.
– Hiten Samtani