Zigg Capital nabs $225M to invest in proptech startups
VC firm will target growth-stage deals
Zigg Capital, a proptech venture capital firm co-founded by entrepreneur Dave Eisenberg, has raised $225 million to double down on real estate technology.
The haul is double the size of Zigg’s debut fund, which deployed $100 million into startups over the past two years. Zigg will continue to focus on early-stage startups, but it will now be able to write bigger checks and participate in growth-stage rounds at a time when the pandemic has pushed the real estate industry to adopt new technology.
With both funds, Zigg raised money from institutional investors, foundations and sovereign wealth funds, but it avoided backing from real estate players to avoid bias in investing, it has said.
The University of Chicago and other institutional investors participated in the most recent fund, according to the Wall Street Journal, which first reported the news.
Eisenberg launched Zigg in 2018 with former Morgan Stanley analyst Ryan Orley. Eisenberg previously sold 3D imaging startup Floored to CBRE, and was also on the early teams at Bonobos, an e-commerce retailer acquired by Walmart, and TellApart, an ad tech startup acquired by Twitter.
To date, Zigg has backed 25 companies including Juniper Square, an investment management software company; VTS, a lease management platform; and Cherre, a real estate data startup. Seventeen of its portfolio companies raised additional funding from generalist VC funds including Andreessen Horowitz, Firstmark, Ribbit, Sequoia and Tiger Global Management.
“The pandemic and current housing crisis both expose how we must reimagine our built environment,” Zigg said in a statement. “Shifting demographics, evolving preferences, and social inequality are driving changes in the home, the office, and the places people consume goods.”
According to Pitchbook, investors pumped $2.5 billion into proptech startups during the first quarter of 2021, compared to $600 million during the same period in 2020 and $1.2 billion in 2019.
That included several of Zigg’s portfolio companies, such as Kasa, a short-term rental operator that raised $30 million in October, and Snapdocs, a digital real estate closing company, which raised $60 million the same month.
In recent months, investors have committed additional capital to VC funds participating in the renewed investment activity.
Camber Creek closed a $155 million proptech fund in October, and last week, Fifth Wall Ventures said it secured an $85 million commitment from Ivanhoe Cambridge to participate in four of its funds. Fifth Wall manages $1.7 billion across several funds, including a $100 million European proptech fund launched during the pandemic. Last month, it also raised $345 million for a blank-check company to take a proptech startup public.