Real Estate

Venture Capital Firm Fifth Wall Ventures Latest To Launch A SPAC

The firm is raising $250 million through its public offering with the goal of acquiring and taking public a startup, the company confirmed in an SEC filing on Wednesday.

Fifth Wall Ventures, one of the industry’s leading real estate technology venture capital firms, is launching a special purpose acquisition company (SPAC), the company confirmed in a filing Wednesday with the U.S. Securities and Exchange Commission (SEC).

In the filing, the company confirmed plans to focus on industries consistent with Fifth Wall Ventures background, so it’s likely focusing on taking public a company in the real estate industry.

“Our strategy is to identify and acquire real estate technology businesses, with a focus on later-stage companies with high-quality growth fundamentals and strong market dynamics, whose pace of growth can benefit from our operational expertise and differentiated distribution capabilities,” the filing reads.

Fifth Wall currently manages more than $1.3 billion in committed capital, with investments in more than 40 companies — including six with a market value of more than $1 billion, according to the filing.

As of November 30, 2020, Fifth Wall manages $1.3 billion in committed capital on behalf of its investors across three core fund strategies and has invested in more than 40 companies, including six that have gone on to become “unicorns,” or startups with a private market valuation in excess of $1 billion.

The company’s real estate technology investments include Opendoor — which just went public via SPAC — as well as insurance startup Hippo, lending startup Blend and digital closing startup Notarize, among others.

Fifth Wall has launched two U.S. proptech funds, the first of which clocked in at $212 million and closed in May 2017. It followed that with a $503 million fund in July 2019 and more recently closed the first round of a European protech fund and is raising money for a climate proptech fund.

In the filing, the firm says it’s “approximately five times larger than the next largest proptech-focused venture capital manager.”

The SPAC — essentially a shell company that acquires another company with the sole purpose of taking it public  — is seeking to raise $250 million by offering 25 million shares at $10.

While the company hinted it will be focused on the proptech space, it also did not rule out taking one of its own investments public.

“Fifth Wall is one of the largest and most active venture investor at the intersection of real estate and technology and has a proven track record with deep experience in investing, operations and technology as well as a global consortium of real estate partners representing almost every real estate sector and ever major geography,” the filing reads.

“We intend to leverage our sponsor’s expertise and extensive network of strategic [limited partners], portfolio companies, real estate relationships and reputation in the real estate technology sector to identify investment opportunities with meaningful near term growth potential that can generate attractive risk-adjusted returns for our stockholders.”

The company also cited the performance of publicly traded real estate technology companies and increased digitization trends in real estate due to the pandemic as a reason for the timing of the SPAC launch.

Employing a SPAC to go public has been a more popular route, with many investors launching their own. Spencer Rascoff, the co-founder of Pacaso, dot.LA, Zillow and Hotwire, as well as the SoftBank Vision Fund, are among those seeking a startup to take public.

Employing a SPAC allows a startup to avoid some pre-IPO scrutiny that dogged companies like WeWork. 

Email Patrick Kearns

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