On Tuesday, Ivanhoé Cambridge, the Montreal-based private market real estate subsidiary of Canadian institutional investor Caisse de dépôt et placement du Québec (CDPQ) and manager of C$60.4 billion (about $48 billion) in client assets, made a bold acquisition in the fast-growing real estate technology (proptech) space. The firm has announced a strategic partnership with Los Angeles, California’s Fifth Wall, the world’s largest venture capital firm focused solely on real estate technology, a deal motivated (as the firms expressed in a joint statement announcing the corporate tie-up on Tuesday) their “shared belief” that the partnership will accelerate Ivanhoé Cambridge’s technology adoption and innovation across its portfolio.
The investment will make Ivanhoé Cambridge Fifth Wall’s single-largest investor, the first investor in four Fifth Wall products with an $85 million commitment toward proptech investments in North America and Europe, and the first investor in Fifth Wall’s dedicated Climate Technology Fund.
“This strategic partnership is perfectly aligned with our investment vision and will enable us to create value as well as accelerate the deployment of technology-based solutions across our portfolio,” said Sylvain Fortier, Chief Investment and Innovation Officer at Ivanhoé Cambridge. ”It will allow us to have direct access to companies and have insights into emerging trends in proptech.”
With some $1.7 billion in commitments and capital under management across multiple strategies, Fifth Wall works with strategic limited partners in venture capital, and today, 65 of the largest real estate owners, operators and developers from 15 countries have invested in one or more of Fifth Wall’s funds. Fifth Wall’s investment track record and network are expected to provide unique insights and direct access to technological solutions enabling Ivanhoé Cambridge to further strengthen and accelerate its technological and service-driven transformation.
Fifth Wall is already backed by a consortium of institutional real estate investors, including BNP Paribas Real Estate, British Land, CBRE, Cushman & Wakefield, D.R. Horton, Equity Residential, Lennar, MetLife Investment Management, Mitsubishi Real Estate, Nuveen Real Estate, Prologis, PulteGroup and others.
“Real estate owners are finding that while investing in technology and innovation is complicated and challenging to do it all in-house, it’s absolutely imperative to the future of their business,” said Fifth Co-Founder and Managing Partner Brendan Wallace.
“Proptech is no longer niche; it is now one of the largest categories of venture capital and transforming the real estate industry. Ivanhoé Cambridge’s significant commitment to Fifth Wall symbolizes their deep understanding of how important proptech has become. It is also inspiring to have Ivanhoé Cambridge as the first investor in Fifth Wall’s Climate Technology Fund, and I hope their bold commitment to that fund encourages other real estate owners to begin investing in Climate Tech and to fund the R&D that is required to decarbonize the real estate industry.”
A Proptech Unicorn
Meanwhile, venture capital interest in proptech targets remains red-hot. On Monday, real estate technology company Side–which is a disruptive brokerage platform active in California, Texas and Florida–announced a $150 million Series D funding round, led by tech investor Coatue Management. The Series D round has established Side as one of the only real estate companies in the world to achieve a $1 billion implied valuation–i.e. “unicorn”–status.
The company has received over $200 million in venture funding to date, from investors including Matrix Partners, Trinity Ventures, and Sapphire Ventures. The latest round will support a planned expansion of its “white-label brokerage platform” beyond the current trio of SunBelt markets.