The name Brendan Wallace won’t mean much to most people, but his influence just greatly increased.
Alongside his co-founder Brad Griewe, he has raised $212m for a proptech fund.
This is their first official fund, after a few years of advising on proptech fundraising and participating in a number of successful investments.
To date they’ve overseen $60m of investments, of which they still control $28m, into companies such as VTS and Opendoor.
Alongside Thrive Capital – the venture fund founded by Josh Kushner – and Metaprop, the PiLabs of the US, they are part of a club of investors with seriously large amounts of money to help make proptech companies successful.
I’ve highlighted before how the ten largest Proptech investments in the world were all in the US last year. There’s no doubting that 2017 will be more of the same.
Between the two dedicated Proptech funds of PiLabs and ConcreteVC there is little money to go around. Companies they invest in are reliant on funding much more money elsewhere to be able to succeed.
And success is why Fifth Wall has raised so much money: they claim their investments to-date are worth $240m on paper.
So who is Brendan Wallace and why did so much money back his ability to invest?
Starting out as a Goldman Sachs banker Brendan soon founded a big data company called Identified.
His Identified journey was whirlwind: raising a reported $22.5m before subsequently being acquired by software giant Workday.
Post cashing out of Identified, Brendan has been angel investing. Most notably he made money from investing in DollarShaveClub which was famous for a certain video.
That video propelled the company to a $1bn sale to Unilever. Video done right matters. Just ask Purplebricks and their almost £1bn valuation.
Back to Brendan, here’s a quote from Cameron Winklevoss – yes, one of the twins who sued Mark Zuckerberg and Facebook for allegedly ripping off Harvard Connection:
Brendan and I have invested in several deals together and plan to do more in the future. He brings the unique perspective of a founder with an exit (Identified) and a very active angel portfolio that he has been building for years.
Source: https://angel.co/brendan-wallace
Success attracts more success.
VTS and Hightower in the US are seen as successful because they merged. A deal reported to be worth $300m on paper.
Purplebricks was deemed a success because it IPOed and then the stock price went up (after briefly going down). Regardless of the underlying business, perception of success is success.
Is it a coincidence that there haven’t been any UK proptech successes beyond those of the purple persuasion?
Last week’s Future Proptech conference was incredibly well attended with almost 900 people.
But there was little to celebrate. No deals, no big names.
UK proptech and all associated with it are the height of small thinking and often-ignored hype.
Both Ros and I would love to feature incredible innovation and interested proptech deals.
Here’s hoping some of this US money makes a splash here, so we have big UK Proptech stories to write about. Beyond Zoopla and Purplebricks.
Here’s the Fifth Wall press release: http://www.thenewsfunnel.com/press-release/introducing-fifth-wall-ventures
Message to Rayhan
Rayhan, who would you approach as the best UK provider to back a proptech innovation?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The 3 F’s, industry or overseas.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
A lot in the industry don’t take funds like PiLabs seriously. Their funds tend to sway away from agency to topics they raise and raise on that are typically anti traditional agency.
Such funds typically get run by people with very little experience of our industry, mainly from fintech.
In America and other countries proptech is more than the next VR or how to avoid agents and do something budget for landlords.
Fintech moving over also typically back budget and FSBO models in the UK. Its a real shame the property industry doesnt get behind our industry.
Even Savills put £ms crazily into Yopa.
We need a proper proptech fund in the UK. Sadly there isnt one today.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Could someone please translate Mr M’s comment into something that can be comprehended by an English-speaking person?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
People smart enough to develop tech are smart enough to avoid schemes that effectively have compound interest rates of about 215.4% annum; £1 borrowed £10 expected back after 3 years
The people with cash to invest are normally from a financial services background, they don’t understand estate agency is not a retail sales industry and can’t figure out why disruption doesn’t work.
America is brilliant, they understand MLS.
????
????
There is no money to invest in products agents don’t need or want because although its a great idea not enough agents will buy the product to provide VC’s with 10x return on investment in 3 years
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
@Agencyinsider.
I and many others dont class PiLabs as a serious player to bring new yech to agents.
Some of their tech is based on doing away with traditional agents.
A lot of the fintech (financial tech guys) who know little about the property industry are claiming to know about it to raise funds which are not helping estate agency.
Even the Purple funds have a large fintech background.
Its time there was a serious proptech fund started in the UK. None exit at the mo
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
If you look at a lot of the PropTech out there the large scale operations are often aimed at the likes of smart homes, the BTR sector- both of which have a long way to go to deliver a sizeable marketshare for large exits. Probably one of the biggests successes at present, I would argue, from a start-up to where they are now is FixFlo who have retained growing numbersa and have continued to identify new markets to expand into. What is more, their product is truly international.
It is also important to understand that, any company that thinks they are on to something, wont be rushing for finance to early. Why sell of the majority of a good idea, cheap? Many are taking that 2-3 year period, keeping investmenet to a minimum, for proof of concept and will then look to raise finance at a much more beneficial period for both the founders and the company- that is to say, they should have identified a path of success and therefore know wher to spend the money.
Investment is essential to make serious growth and a decent exit, however finance to early can kill a company as they are instantly on a clock with (udually) very specific metrics/goals to acheive in that allotted timeframe. Whilst the understanding of PropTech has improved dramatically, there is a long way to go with many small agents still cautious or ill-informed. Whilst PropTech is an exciting area I think we’ve got another 2-3 years before we see some real sizeable traction.
What is also interesting to see are an increasing number of start ups competing in the same areas. I have seen several comanies launch in the last 12 months offering to replace depsoits with insurance, with many claiming sizeable seed funing raises, however I am yet to see any sizeable adoption in the market place. Likewise, there are more and more ‘private landlord’ offerings coming out but, again, adoption numbers are currently still very small. If you look at the marketing spend PB has had to make to get 5% market share (and, despite this, financial losses keep coming)- here such offerings staing ‘all we need is 2.5% of the market’ highlights that this is very different to a simple acheivement.
It’s an exciting space and we will see a hell of a lot of acquisitions and mergers over the next few years also as offerings are forced to merge to create a sizeable client base to work with.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register