JLL launches $100M fund to boost real estate tech startups

Through its Spark Global Venture Fund, JLL joins competitors that have already placed bets

Jun.June 05, 2018 06:30 AM

JLL Spark co-CEOs Mihir Shah and Yishai Lerner (Credit: JLL, Public Domain Pictures)

JLL is launching a $100 million global venture fund aimed at cultivating real estate technology startups and connecting them to developers, jumping in as competitors have already placed big bets on that aspect of the industry.

The fund, which the company announced on Tuesday, will run under the banner of JLL Spark. It launched last year to identify and expand the array of technology that can help property owners manage, lease and invest worldwide.

The venture will join others that are banking on real estate tech startups, including competitor CBRE. It acquired Floored, which creates virtual 3D floor plans for landlords and brokers, for an undisclosed price earlier this year.

Fifth Wall, meanwhile, recently announced it was starting a new fund to raise $200 million for retail tech startups.

A number of other companies have also benefitted from the venture capital attention, including Knotel and Reonomy, which together have landed tens of millions of dollars in funding since February.

Still, JLL Spark co-CEO Mihir Shah said the real estate industry has “traditionally been slower to adopt new technology” than other industries, but internet-of-things software is increasingly making it easier to track how buildings use energy and space.

“There are new startups and technologies that can take all your data and use an algorithm to figure out how you can better operate [your] building,” Shah told The Real Deal. “So think of this algorithm learning over time, taking all this data and saving you a meaningful percentage in operating expenses every year.”

JLL Spark has already acquired STESSA, a software company that helps property owners keep tabs on their assets. Now, the fund’s directors are hoping to dole out seed and Series-A rounds from “a few hundred thousand to several million dollars” each, they announced.

But more than just providing capital, leaders of the JLL Spark Global Venture Fund are aiming to create a “bridge” between real estate technology companies and their potential clients, Shah said.

“The challenge for technology startups is always distribution … while clients of JLL are trying to figure out which of all these emerging technologies are the best,” Shah said. “So in order to be an efficient bridge between the two, we’re trying to focus on the areas where we can really add value.”

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