The Largest Venture Fund Focused On The Built Environment

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The largest venture fund focused on the built enviornment. (Image: Fifth Wall)
The largest venture fund focused on the built enviornment. (Image: Fifth Wall)

Fifth Wall is the largest venture capital firm focused on the global real estate industry and property technology for the built world. Fifth Wall is investing in technologies to decarbonize the built environment. To do so, Fifth Wall connects many of the world’s largest owners and operators of real estate with entrepreneurs. Fifth Wall believes that building a strategic corporate consortium can result in game-changing investments and collaborations.

Fund Snapshot

  • Stage: Series A – Series C
  • Check Size: $5M – 20M
  • Geography: Primarily North America but Global Scope
  • Lead/Follow: Lead 

About the Fund

Why was the fund started?

Fifth Wall’s climate fund was created to remedy the real estate industry carbon footprint, which accounts for 40% of the world’s greenhouse gas emissions. Even if all technology in real estate and the built environment were updated with the most efficient and sophisticated technology, it would only reduce emissions from real estate from 40% to 20% of the world’s global emissions. This is the challenge real estate stakeholders face when trying to decarbonize – they simply have no other feasible option. Fifth Wall wants to change this by identifying and supporting the next generation of technologies to decarbonize the $2-5T built environment opportunity. To achieve this, Fifth Wall will invest across all solutions, including software, hardware, deeptech, or CapEx heavy startups. Fifth Wall is building a consortium of corporates in the sector to bring them technologies that can decarbonize the space.

What domains in climate tech does Fifth Wall have the greatest expertise in?

Fifth Wall sees climate tech as two broad categories – energy and industrial technology.
Energy means focusing on clean and green energy going into buildings. Subsectors here include sources of generation (solar, wind, etc.), grid decarbonization, and grid resiliency.

Industrial technology entails making buildings clean and green. The different verticals here are materials, life of the building, and end of life. The main facts that support this part of the thesis are:

  • The construction industry uses 40% of the world’s raw resources.
  • 5% of all materials that are sent to construction sites get sent directly to landfill.
  • 40% of materials in landfills are from construction.

What type of portfolio support does your team provide?

The way Fifth Wall is structured differentiates them as a fund and supporter to their portfolio companies.

Fifth Wall has a consortium of 70-80 of the world’s developers and operators in the sector of which are all investors in Fifth Wall. As a result, these businesses have buy-in to the startups Fifth Wall invests in, which leads to a startups’ success in finding and selling to customers.

In addition to access to corporates and customers, Fifth Wall provides support to a startups’ capital stack. Fifth Wall can support startups from equity financing through to IPO, including debt financing. Half of the team at Fifth Wall, the capital markets team, supports startups with access to debt capital.

About Investments

What is Fifth Wall’s investment process and timeline?

Fifth Wall is focused on long-term relationships for investments. Due to their size and consortium of LPs, Fifth Wall knows about almost every startup that intersects with climate and the built environment. Typically, Fifth Wall knows about new startups within the first year of operations. Fifth Wall uses their knowledge, size, and network to help startups succeed – they will help make introductions that could lead to pilots and customers.

Fifth Wall’s investment process can vary based on the relationship between a startup and Fifth Wall. If there is already a standing relationship, Fifth Wall can make investment decisions quickly. On the other hand, if, by any chance, there is no relationship by the time a startup approaches Fifth Wall for investment, Fifth Wall will make a quick decision to either pass or dig in deeper into diligence.

What would make Fifth Wall consider deviating from their typical criteria?

Fifth Wall asks two questions when evaluating startups:

  • Can the product sell?
  • Is the product good for the environment?

 

If the answer is yes to both questions, then Fifth Wall is open to digging in more, even if the round size is smaller than where Fifth Wall would normally invest. Fifth Wall is open to investing earlier on if the technology is innovative and if there is an opportunity.

About The Author

Daniel Kriozere

Daniel Kriozere

Co-Founder @ The Impact

Daniel currently works at Lawrence Livermore National Laboratory as a Product Manager. Outside of his day job, he is a Principal at C3, Tech Scout at For ClimateTech, and Venture Scout at Prithvi. He also works with various climate incubators/accelerators (Cleantech Open, Techstars, and Joules Accelerator) and runs The Impact and Innovate Climate – both are newsletters covering startups in the climate space.

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