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This Real Estate Focused VC Firm Just Raised $212M from Real Estate Giants

It isn’t easy to find white space in the world of venture capital, where every venture firm must have a specific vision to sell to the universities, pension funds and family offices that tend to fund them. But Brendan Wallace and business partner Brad Greiwe have a fresh pitch, as well as nontraditional investors. Their L.A.-based venture firm, Fifth Wall Ventures, invests in startups that are benefiting from changes in the real estate market, and they turned to the country’s largest real estate companies to fund it.

Just some of the heavy-hitting limited partners to contribute to the firm’s $212 million debut fund include CBRE, the brokerage and real estate services giant; Equity Residential, the largest owner of apartments in the U.S.; Hines, a major developer of office buildings in the U.S.; Lowe’s, the home improvement franchise; Host Hotels & Resorts, a real estate investment trust (REIT) spun off from Marriott in 1993; Lennar, one of the nation’s largest homebuilders; Macerich, which is the third largest mall operator in the U.S.; and the warehouse operator Prologis.

“Often, new solutions in real estate aren’t hard to build from a tech perspective,” explain Wallace. “You can put vendor management tools in the cloud.  You can demonstrate a positive ROI. What’s harder is go-to-market and distribution risk,” he continues. “If you can’t sell to one of the big [real estate] incumbents, it’s hard to succeed. A handful of these companies really dictate outcomes.”

Fifth Wall is betting its backers’ vested interest in its portfolio companies will naturally help them vault past competitors. Meanwhile, these industry giants are betting on the pair because of their own, somewhat unique backgrounds.

Wallace, who says he grew up in a real estate family, worked first an analyst at Goldman Sachs, then in real estate private equity at Blackstone Group after graduating from Princeton. After attending business school at Stanford, he says he invariably “caught the entrepreneurship bug.” First, along with some Stanford classmates, he cofounded  a recruitment data and analytics company called Identified that sold in 2014 to Workday for undisclosed terms. Again with classmates, he says he later cofounded (but never worked for) Cabify in Madrid, Spain, which is among the larger ride-share services in Latin America.

Greiwe also says he grew up in a real estate family.

More here.

New Fundings

Axonics Modulation Technologies, a four-year-old, Irvine, Ca.-based developer of a rechargeable medical system for the treatment of urinary and fecal dysfunction, has raised $14.5 million in a first close of its Series C round. Backers include Edmond de Rothschild Investment Partners, Advent Life Sciences, Cormorant Asset Management, Legend Capital, NeoMed Management, and a group of private individuals. More here.

Bitfusion, a 2.5-year-old, Austin, Tex.- and Sunnyvale, Ca.-based maker of AI infrastructure management software, has raised $5 million in Series A funding led by Vanedge Capital, with participation from Sierra Ventures and earlier backers Data Collective, Resonant VC, and Geekdom. TechCrunch has more here.

Dinova, an eight-year-old, John Creeks, Ga.-based online marketplace that connects expense account diners to restaurants nationwide, has raised $40 million in growth funding from the Charlotte, N.C.-based private equity firm Frontier Capital. More here.

ExoCoBio, a three-month-old South Korean developer of cosmeceuticals and biopharmaceuticals for skin and tissue regeneration, has raised $11 million in Series A funding from SBI Investment, Atinum Investment, ID Ventures, and Dt&Investment. More here.

Iconixx, a six-year-old, Austin, Tex.-based maker of sales compensation software, has raised $4.2 million in funding led by earlier backers Ballast Point Ventures, Harbert Growth Partners, S3 Ventures, and the Iconixx management team. More here.

Morty, a 1.5-year-old, New York-based mortgage marketplace that’s trying to provide borrowers with more options and transparency, has raised $3 million in funding led by Thrive Capital, with participation from SV Angel, Techstars, FJ Labs, Corigin Ventures, MetaProp and numerous angel investors. TechCrunch has more here.

One, an 11-year-old, Folson, Ca.-based company that develops cloud-based software for the insurance industry, has raised $15.5 million in financing co-led by American Family Ventures and Centana Growth Partners, with participation from earlier investors AXA Strategic Ventures and MassMutual Ventures. The company has now raised $52 million altogether. More here.

Orbital Insight, a four-year-old, Mountain View, Ca.-based geospatial analytics startup that we wrote about at some length last year, has raised $50 million in Series C funding led by Sequoia Capital. Envision Ventures, Balyasny Asset Management, Geodesic Capital, ITOCHU Corporation and Intellectus Partners also joined the round, along with earlier backers GV, Lux Capital and CME Ventures. The company has now raised $78.7 million altogether. More here.

Wavedash Games, a 1.5-year-old, Oakland, Ca.-based game development company, has raised $6 million in funding led by March Capital, with participation from Lowercase Capital, Advancit Capital, CourtsideVC, Machine Shop Ventures, Luma Labs, and Cherrytree VC. TechCrunch has more here.

New Funds

Moderne Ventures, a 1.5-year-old, Chicago-based early stage firm that writes checks of between $200,000 and $3 million to real estate, finance, insurance, and home services companies, has closed its debut fund with $33 million in commitments. The firm was founded by Constance Freedman, who was previously the head of strategic investments at the National Association of Realtors, where she launched and managed its investment arm, Second Century Ventures, and founded its accelerator program. More here.

Salesforce has committed to invest another $100 million via a fourth investment fund meant to help startups develop apps that work with its business software services. John Somorjai, executive vice president of corporate development and Salesforce Ventures, talked with the WSJ about the new pool here.

Exits

Airbnb has quietly acquired for undisclosed terms Deco Software, a two-year-old, San Francisco-based company that helps developers build mobile apps in less time. The company didn’t disclose outside funding if it raised any. TechCrunch has more here.

Cisco announced yesterday that it’s paying $610 million Viptela, a four-year-old company whose networking technology lets companies connect their branch offices to corporate data centers. Viptela was founded by former Cisco engineers and had raised raised nearly $110 million from investors. Fortune has more here.