Fifth Wall team

Fifth Wall's Dan Wenhold, Brendan Wallace, Sarah Liu and Jon Hong (l-r). Credit: Macey J. Foronda for Fifth Wall

Companies

Fifth Wall raises $866m in largest ever proptech fund

The VC firm announced the final close of the Real Estate Technology Fund III, taking its total capital raised for proptech to more than $1bn in 2022 alone.

Backed by a long list of investors, including CBRE, Cushman & Wakefield, Hines and the Moinian Group, Fund III is Fifth Wall’s third fund close this year.

The firm raised $147m for the European Real Estate Technology Fund in February and $500m for the Climate Fund in July.

For the first time, Fifth Wall will target both early- and late-stage startups. The fund is split between two vehicles: Fifth Wall Early Stage Ventures, focusing on startups at the seed to Series B stage, and Fifth Wall Fund III, focusing on startups at the growth equity or Series C stage and beyond.

The fund will consider a broad range of investment opportunities, targeting innovations in brokerage, construction, hospitality, industrial, logistics, multifamily, office, real estate debt, insurance, residential, retail and more.

Among the fund’s investors was Procore, the construction management software company, marking the first time that a company Fifth Wall previously invested in has become a limited partner in one of its funds.

Following the raise, Fifth Wall now boasts more than 110 strategic limited partners from more than 15 companies. Its total capital under management now stands at about $3.2bn.

Supporting the next wave

Although investment in proptech has slowed down in recent months, the sector is considerably more mature than it was six years ago when Fifth Wall launched.

After attracting more than $30bn in investment last year, proptech saw several billion-dollar M&A transactions in 2022. With market maturity comes a growing need for late-stage investors to help these companies scale. That is now the space Fifth Wall wants to occupy.

Brendan Wallace, co-founder and managing partner at Fifth Wall, said: “When we started Fifth Wall in 2016, proptech was not yet a term. Since then, we believe that we played an intrinsic role in the ecosystem’s evolution and continue to propel it forward, not only via capital, but industry awareness and strategic collaboration between our startups and real estate limited partners.

“It’s the natural next step that we’d expand the aperture, deploying two vehicles that enable us to invest from seed to IPO. It signifies our commitment to the ecosystem as it navigates the next wave.”

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