(Bloomberg)—Fifth Wall employed an unusual strategy to raise its second venture fund: It got rival real estate companies to pool resources to invest in property-technology startups.
Los Angeles-based Fifth Wall said Wednesday that it closed the $503 million fund by bringing together mall owners, hotel companies and office developers. Four major U.S. homebuilders invested in the fund -- D.R. Horton Inc., Lennar Corp., PulteGroup Inc. and Toll Brothers Inc. -- as well as competing brokerages CBRE Group Inc. and Cushman & Wakefield Plc.
“Increasingly, real estate owners have recognized it’s very hard to do venture on your own,” Fifth Wall co-founder Brendan Wallace said in an interview. “It’s better to get the right solution than it is to get a solution your peers don’t have.”
Fifth Wall, which closed its first fund in 2017, has more $1 billion under management. It has invested in co-working companies Convene and Industrious, startups that focus on making buildings more energy-efficient and software firms focused on simplifying the process of getting a mortgage.
There were more than 50 investors in the latest fund, and many of them will use Fifth Wall to vet tech solutions they can use in their day-to-day businesses, Wallace said. Lennar, an investor in the first fund, has inked partnerships with five Fifth Wall portfolio companies.
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