It isn’t easy to find white space in the world of venture capital, where every venture firm must have a specific vision to sell to the universities, pension funds and family offices that tend to fund them. But Brendan Wallace and business partner Brad Greiwe have a fresh pitch, as well as nontraditional investors. Their L.A.-based venture firm, Fifth Wall Ventures, invests in startups that are benefiting from changes in the real estate market, and they turned to the country’s largest real estate companies to fund it.
Just some of the heavy-hitting limited partners to contribute to the firm’s $212 million debut fund include CBRE, the brokerage and real estate services giant; Equity Residential, the largest owner of apartments in the U.S.; Hines, a major developer of office buildings in the U.S.; Lowe’s, the home improvement franchise; Host Hotels & Resorts, a real estate investment trust (REIT) spun off from Marriott in 1993; Lennar, one of the nation’s largest home builders; Macerich, which is the third largest mall operator in the U.S.; and the warehouse operator Prologis.
“Often, new solutions in real estate aren’t hard to build from a tech perspective,” explains Wallace. “You can put vendor management tools in the cloud. You can demonstrate a positive ROI. What’s harder is go-to-market and distribution risk,” he continues. “If you can’t sell to one of the big [real estate] incumbents, it’s hard to succeed. A handful of these companies really dictate outcomes.”
Fifth Wall is betting its backers’ vested interest in its portfolio companies will naturally help them…