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Why Real Estate-Focused Venture Firm Fifth Wall Just Raised $503 Million For A New Fund: Term Sheet

Fifth Wall managing partner Brad Greiwe speaking at an event.Fifth Wall managing partner Brad Greiwe speaking at an event.
Fifth Wall managing partner Brad Greiwe speaking at an event.Mauricio Hoyos

Real estate-focused venture capital firm Fifth Wall has closed what it’s calling the largest real estate venture fund raised to date—having secured $503 million in commitments that it plans to invest in real estate technology, or “proptech,” companies.

My colleague Rey Mashayekhi has the news this morning. He reports that the new fund is more than double the size of the three-year-old venture capital firm’s first fund, which closed at $212 million in 2017. But interest in the burgeoning proptech market has only grown since then, and Fifth Wall raised capital for “Fund II” from more than 50 limited partners (LPs) in 11 countries—most of whom are institutional commercial real estate owners, operators and investors.

You might remember that I interviewed Fifth Wall co-founder Brad Greiwe for Term Sheet last summer about the firm's position in the VC ecosystem, its recent investments, and the state of the real estate market. At the time of our interview, Greiwe was very bullish on tokenizing real estate. He told me that “tokenization is probably the most interesting thing we think about on a daily basis.”

Now, it looks like the investment thesis for Fund II has slightly changed. Mashayekhi reports:

While the new fund will target an array of proptech services, [Fifth Wall co-founder Brendan] Wallace said investments will mostly focus on business-to-business enterprises such as Cobalt Robotics, one of four investments that Fifth Wall has already made through Fund II. The San Mateo, Calif.-based startup builds indoor autonomous robots that function as “robotic security guards,” and Wallace said Fifth Wall hopes its investment will see the technology deployed at its LPs’ buildings. Fifth Wall took part in Cobalt’s $35 million Series B round earlier this year alongside the likes of Coatue and Sequoia Capital.

Read more on Fortune.com.

THE AIRBNB INVESTORS: I moderated a panel yesterday with Sequoia’s Alfred Lin, Andreessen Horowitz’s Jeff Jordan and Lightspeed’s Jana Messerschmidt at Fortune’s Brainstorm Tech conference. We covered a number of topics including their time as operators at high-growth companies, investing early in Airbnb, and their biggest failures as investors. Read the story here & watch the full panel video here.

NEW UNICORN: IAC/InterActiveCorp will acquire a $250 million stake in Turo Inc, a San Francisco-based peer-to-peer car-sharing company in a deal that values the company at more than $1 billion. 

…AND MORE FUNDING NEWS: Dust Identity has raised $10 million in Series A funding, led by Kleiner Perkins and including strategic investments from the VC arms of both Lockheed-Martin and Airbus. The money will help the Framingham, Mass.-based company refine and commercialize its novel technique of using minuscule diamond fragments to attach unique, durable tracking codes to physical objects, like high-tech components. Read more at Fortune.

PEOPLE MOVES: Here’s what’s going on at:

Warburg Pincus: Joseph Landy is stepping aside as co-chief executive officer of Warburg Pincus, the private equity firm he has helped manage since 2000, according to Bloomberg. Landy will transition out of the co-CEO role over the next year.

Atomico: Atomico founding partner Mattias Ljungman is leaving to raise his own seed fund, according to TechCrunch. Ljungman’s seed firm is to be called Moonfire Ventures and Atomico will reportedly invest in the new venture and become one of its first LPs. 

VENTURE DEALS

Icertis, a Bellevue, Wash.-based provider of enterprise contract management in the cloud, raised $115 million in Series E funding at a valuation of more than $1 billion dollars. Greycroft and PremjiInvest co-led the round, and were joined by investors including B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners and PSP Growth.

Graduway, a London-based provider of alumni engagement and career services management software for educational institutions and non-profit organizations, raised $60 million from K1 Investment Management.

ContractPodAi, a London-based provider of AI-powered contract lifecycle management software, raised $55 million in Series B funding. Insight Partners led the round, and was joined by investors including Eagle Proprietary Investments. 

AlphaSense, Inc., a New York-based AI-powered business insights platform, raised $50 million in Series B funding. Innovation Endeavors led the round, and was joined by investors including Soros Fund Management LLC.

100 Thieves, a Los Angeles-based lifestyle brand and esports company, raised $35 million in Series B funding. Artist Capital Management led the round.

Neocis Inc, a Miami-based provider of a robot-assisted surgical platform for the dental industry, raised $30 million in funding. Investors include Mithril Capital Management and Norwest Venture Partners.

LANDR​, a Canada-based AI-powered creative platform for musicians, raised $26 million in Series B funding. Investors include Sony Innovation Fund, Shure, Investissement Québec and Fonds de solidarité FTQ, Warner Music, Plus Eight Equity Partners,​ Slaight Communications, YUL Ventures and PEAK Capital Partners​.

Kopari Beauty, a San Diego-based coconut-powered beauty brand, raised $20 million in funding. Investors include Growth Fund of L Catterton, Unilever Ventures, and University Growth Fund. 

Ascend, a Palo Alto, Calif.-based autonomous dataflow service, raised $19 million in Series A funding. Accel led the round, and was joined by investors including Sequoia Capital, Lightspeed Venture Partners, and 8VC.

SAM Labs, a Tampa, Fla.-based provider of tech education products, raised $8.9 million in funding. Investors include Partners in Equity and Inventures Investment Partners.

AppyParking, a U.K.-based kerbside management and mobility technology firm, raised 7.6 million pounds ($9.4 million) in Series A funding. Investors include Hyundai Motor Company, Sumitomo Corporation, West Hill Capital, Aviva Ventures and Breed Reply.

Methinks, a South Korea and Silicon Valley-based provider of a video-based research platform, raised $7 million in Series A funding. Sema Translink led the round, and was joined by investors including KB Investment and Hyundai Investment.

CHOOOSE, a Norway-based climate startup, raised $4 million in seed funding. Contrarian Ventures and the Viessmann Group’s VC Vito co-led the round.

Travelstop, a Singapore-based business travel and expense management startup, raised $3 million in pre-Series A funding. Accel led the round, and was joined by investors including Strive and SeedPlus

Pixion Games, a London-based studio focused on building competitive esports games for mobile devices, raised $2 million in seed funding. Eldridge Industries led the round.

Augmentir Inc, a Horsham, Penn.-based provider of augmented worker software for industrial companies, raised funding of an undisclosed amount. Pritzker Group Venture Capital led the round, and was joined by investors including Lerer Hippeau and HOLT Ventures.

HEALTH AND LIFE SCIENCES DEALS

AM-Pharma, a Netherlands-based clinical-stage biopharmaceutical company focused on developing a treatment for acute kidney injury, raised $133 million in funding. LSP and Andera Partners led the round.

Recursion Pharmaceuticals, a Salt Lake City-based biopharma company, raised $121 million in Series C funding. Scottish Mortgage Investment Trust PLC led the round.

Notable, a San Francisco-based provider of clinically validated AI platform focused on cancer drug development, raised $40 million in Series B funding. B Capital Group and LifeForce led the round.

Trefoil Therapeutics, a San Diego-based biotech firm, raised $28 million in funding. Bios Partners led the round, and was joined by investors including Access Biotechnology, Hatteras Venture Partners, Aju IB Investment, Correlation Ventures, ExSight Ventures and InFocus Capital Partners.

PRIVATE EQUITY DEALS

– Mammoth Holdings, which is backed by Red Dog Equity LLC, acquired Wash Time Express Inc, an Atlanta-based single-unit express conveyor car wash. Financial terms weren’t disclosed.

– Spectrum Equity made an investment in Visual Lease, a Woodbridge, N.J.-based cloud-based lease management and accounting software provider. Financial terms weren’t disclosed. 

OTHER DEALS

– WHP Global acquired Anne Klein, a Portage, Wisc.-based women’s fashion brand, from Premier Brands Group. Financial terms weren’t disclosed. 

IPOs

DouYu International Holdings, a Wuhan, China-based live game-streaming platform, plans to raise $775 million in an IPO of 67.4 million shares (33% insider selling) priced at $11.50 apiece, the low end of its range. The firm posted $531.5 million in revenue  and loss of $127.4 million in 2018. Tencent backs the firm. Morgan Stanley, J.P. Morgan and BofA Merrill Lynch are underwriters. It plans to list on the NYSE as “DOYU.” Read more.

Livongo Health, a Mountain View, Calif.-based healthcare platform for chronic illness management, plans to raise $230 million (9% insider acquired) in an IPO of $10.7 million shares priced between $20 to $23. It posted revenue of $68.4 million in 2018 and loss of $33.5 million. General Catalyst, Kinnevik Online, and KPCB Holdings back the firm. It plans to list on the Nasdaq under the symbol “LVGO.” Read more.

ProSight Global, a Morristown, N.J.-based specialty insurer, plans to raise $105 million in an IPO of 8.8 million shares (60% insider selling) priced between $16 to $18. Goldman Sachs and TPG back the firm. The firm posted revenue of $785.9 million in 2018 and income of $55.3 million. It plans to list on the NYSE as “PROS.” Read more.

EXITS

– Invitae Corporation agreed to acquire Jungla, a San Francisco-based provider of an AI-driven biotech firm, for about $50 million. Jungla had raised approximately $2.5 million in funding from investors including Andreessen Horowitz, SOSV, and IndieBio.

FIRMS + FUNDS

Argonaut Private Equity, a Tulsa-based firm, raised $350.7 million for its fourth fund, according to an SEC filing.

PEOPLE

Bain Capital Ventures promoted Merritt Hummer to senior principal and Aneesha Mehta to principal. 

– Elgin Thompson joined JMP Securities as a managing director.