As an investor, it’s a “tough sector, because you’re not only seeing the multiple compression on the tech side, but you’ve also seen a decrease in demand. …Transaction volume has come down” for housing, Flint told me recently at the New York Hilton Midtown hotel bar on the sidelines of a real estate conference. But, “The flip side is, it’s probably the single best time to be investing in real estate startups,” he argued. 

Flint’s reasoning is that, considering the rapid changes in the housing market in recent years, it’s creating new opportunities for “fast-moving startups to more effectively serve market participants in ways incumbents are unable to do.” He notes that while that’s true for all sectors when there’s a dislocation, housing transactions, in particular, have dropped over 30% in the last year (through December), while interest in new startups that help boost revenue for agents and brokers is rapidly increasing. “It’s a lot of these B2B tooling [things],” notes Flint: “How can you help agents make more money?” (Flint also recently penned a sprawling think piece on the future of real estate ownership.) 

Meanwhile, as mortgage rates have risen in the last year (based on the latest estimates, the average 30-year fixed rate is at 6.5%), Flint says it’s creating an opportunity for startups and products that “can help lower the expense of managing or renting properties, or those that can reduce mortgage cost and complexity by tapping into people’s home equity.” Think startups like Tomo, which is focused on streamlining the mortgage approval process, and Hitch, which enables quick access to home equity—both NFX investments. Flint says roughly 50% of his focus at the firm is on proptech. 

The startups Flint is interested in now are “probably the opposite of what was interesting two years ago,” like low-margin businesses fueled by low interest rates. Right now, in proptech, he’s looking for “cool technology, really hard to replicate technology, really clever go-to-market,” and “high” operational efficiency. 

He also believes that as we continue to see what the post-pandemic landscape looks like for where we live and work, the new environment will create more opportunities for companies working on addressing the changes happening in commercial and residential real estate. 

Flint isn’t alone in thinking it’s prime time for disruption in the real estate market: Last summer I wrote about why VCs think startups in the sector are hot, including how companies like Arrived, which enables fractional investing in real estate, have been picking up traction. And let’s not forget infamous WeWork founder Adam Neumann’s new residential real estate endeavor, Flow, which was funded last year with a whopping chunk of cash from Andreessen Horowitz. 

Despite its challenges, the mood in the real estate market now is definitely better than when Flint was building his own company. He recalls that during the financial crisis, “It felt like this was the worst time to be doing what I was doing. …That’s the sort of perspective that is helpful to offer: It did feel awful coming to work every day and your clients were going bankrupt [and] the headlines were saying, ‘real estate is going down.’” 

The housing market is currently nowhere near as bad as it was back then—or even last fall, for that matter—but the proptech space still faces challenges. VC funding into proptech dropped in 2022 after a boom in 2021, mirroring most other sectors. Flint says that generally the seed stage (where NFX invests) was less affected by the slowdown, and that NFX is “always” looking for and investing in proptech deals. 

But unlike other flashy parts of the tech landscape, Flint adds “It’s not like real estate is going to be superseded by some other technology. …It’s not like a smartphone,” which could be replaced “by some other wearable. It’s going to ebb and flow,” he notes.

But right now, it seems, it’s in a flow. 

Why Google could beat out Microsoft—and startups—in the A.I. battle: It’s all-out war between Google and Microsoft on A.I.-powered search, as both titans unveiled their A.I. search chatbots last week. But despite its rocky start, Google’s new ChatGPT rival Bard may have a few key advantages over Microsoft’s Bing. That could be bad news for Microsoft, but, according to Lightspeed Venture Partners’ Gaurav Gupta, even worse news for startups. Dig in deeper in my story here.

Inside the rise of Weijian Shan, the Chinese-born dealmaker at the head of one of Asia’s largest private equity firms: Shan went from a teenager who never went to high school to spearheading the first acquisition of a Chinese bank by a foreign investor, when an arm of TPG bought Shenzhen Development Bank. Now he’s leading one of Asia’s largest private equity firms, PAG. Dive into the story in my colleague Shawn Tully’s latest. 

See you tomorrow,
Anne Sraders
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
Submit a deal for the Term Sheet newsletter here.

Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Turno, a Bengaluru, India-based electric vehicle distribution and financing platform, raised $13.8 million in Series A funding. B Capital and Quona Capital co-led the round and were joined by Stellaris Venture Partners, Avaana Capital, Alteria Capital, and InnoVen Capital. 

PRIVATE EQUITY

- CertaSite, backed by Riverside, acquired Ace Fire Protection, a Lafayette, Ind.-based fire protection company. Financial terms were not disclosed.

- Triwest Capital Partners acquired a majority stake in Phoenix Fence, an Edmonton, Canada-based fencing provider. Financial terms were not disclosed.

OTHER

- Conductor acquired Searchmetrics, a Berlin-, London-, and San Mateo, Calif.-based search data provider. Financial terms were not disclosed.

- dbt Labs agreed to acquire Transform, a San Francisco-based metrics-focused data company. Financial terms were not disclosed. 

- Fresche Solutions acquired Silveredge Consulting, a Westchester, Ill.-based IT consulting services provider. Financial terms were not disclosed. 

PEOPLE

- GV, the Mountain View, Calif.-based independent venture capital investment arm of Alphabet Inc., hired Luna Schmid as an investment partner. Formerly, she was with Summit Partners.