Fifth Wall Raises the Roof

Real estate venture capital firm Fifth Wall has raised a second round of more than $500 million in funding for Proptech startups–more than double the amount of its first capital raise, and creating the single-largest real estate venture capital fund to date. While the news is certainly bullish for the burgeoning Proptech industry as it aims to disrupt the commercial real estate market (an often opaque and illiquid market valued at an approximate $16 trillion in the U.S. alone), the billion-dollar Fifth Wall fund is also notable for the lengthy and diverse roster of traditional U.S. and global property investment firms that now number among the fund’s LPs. These include Cushman & Wakefield, CBRE, Toll Brothers, Marriott, Host Hotels, with partners in the U.S., Europe and Asia.

Dawn of the Tokenizers

Among the technologies that Proptech venture capital may be looking to accelerate is real estate tokenization, a blockchain-enabled ownership structure that allows investors to own partial shares in an otherwise illiquid asset, funded through cryptocurrency tokens recorded on a blockchain ledger. Recent market test cases in tokenization of “trophy assets” have shown mixed investor interest. Last fall, a 20 percent stake in the St. Regis Aspen Resort was successfully sold using digital tokens in a first-of-its kind deal executed by New York-based asset manager Elevated Returns, an early mover in the tokenized asset space. Earlier this spring, fintech investment firm Inveniam Capital Partners announced plans to tokenize $260 million in real estate and infrastructure assets including a Miami WeWork. Platform business models are now also becoming a feature of the industry—London-based property tokenizer Atlant allows investors not only to access fractional ownership in global properties, but to buy and sell them on an online trading platform just like a stock.

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