PitchBook blog

Fifth Wall is a venture capital firm specializing in real estate technology. Also known as PropTech, the sector is made up of companies developing and leveraging technology intended to help facilitate the purchase, management, maintenance, and investment in both residential and commercial real estate.

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Michael New
Principal, Capital Formation

2016

Year founded

$3B

Assets under management

Fifth Wall was born out of the recognition that real estate—among the largest global industries—was lagging in technology development and application. A lack of focused funding for startups exacerbated the problem. The success of real estate technology startups hinged on distribution to a few big-name industry incumbents, the very companies that ultimately became early investors in Fifth Wall’s initial fund.

“The firm quickly discovered that PitchBook could do much more than provide details on startups...the platform enabled Fifth Wall to identify more distribution opportunities for its portfolio companies, further solidifying its value as an investor."

– Michael New, Principal, Capital Formation

The prominence of Airbnb, WeWork and Zillow put real estate tech on the map. The rise of these companies was a wake-up call for the rest of the real estate industry. There was a recognition of the fact that real estate would inevitably collide with technology in the same way that technology had transformed many other industries. It became evident that real estate as an industry needed to, as Jack Welch famously said, “change before you have to.”

Fifth Wall meets PitchBook

The Fifth Wall team initially leveraged PitchBook to get to know the companies it was considering investing in. PitchBook made it possible to look at a broad swath of targets and build a database of information including:

• Fundraising to date
• The target’s current investor base
• Its latest valuation
• Team overview
• Contact information

While Fifth Wall still uses PitchBook to research investment targets, its relationship with the platform evolved. The firm quickly discovered that PitchBook could do much more than just provide details on startups. It began using PitchBook to identify and engage limited partners (LPs) from traditional investors in the venture asset class and large real estate corporations.

Digging deeper

Fifth Wall’s business model is unique—its limited partner base looks very different than other venture funds. Established, traditional real estate companies make up a substantial portion of Fifth Wall partnerships. Fifth Wall leaned heavily on PitchBook to identify traditional real estate firms with a propensity toward tech who might consider Fifth Wall as an articulation of their technology strategy.

“Our client service team is always available and willing to help. They regularly show us new tips and tricks and help us find features we wouldn’t find on our own."

– Michael New, Principal, Capital Formation

We didn’t have a magical list of real estate firms that care about technology and it’s certainly not a quick and easy Google search,” said Michael New, Principal at Fifth Wall. “But, with help from our dedicated client service team at PitchBook, we were able to create queries on PitchBook that would help us identify firms that fit our strategy, figure out who the decision-makers were, and tailor a strong value proposition to bring them on board.”

“Our whole team, from executive assistants to marketing to senior founding partners, relies on PitchBook because it can do so much. The way we use PitchBook has evolved well beyond the way we initially intended to use it."

– Michael New, Principal, Capital Formation

The strategy of having real estate firms with a vested interest in supporting technology creation join Fifth Wall funds created a lot of synergy. Portfolio companies are attracted to Fifth Wall because of the distribution it offers vis-à-vis the real estate companies invested in the fund. Likewise, real estate companies are able to gain exposure to technologies that they themselves use and find value in.

Results

Now when Fifth Wall develops a new strategy, rather than spending weeks scouring the internet and meeting with contacts to inform a path forward, it gets the data through a targeted set of queries on PitchBook.

“We can build out a database of the companies that fit the profile for each new strategy we're contemplating in a matter of hours as opposed to something that takes a lot of manpower and weeks to assess,” said New. “Not only does that help us market Fifth Wall, it also helps us work smarter by segmenting out the investable opportunity and prioritizing targets.”

The Fifth Wall team uses PitchBook’s mobile app consistently as well. With PitchBook in their pockets, it’s easy to take meetings and have a quality exchange in short order. Via PitchBook Mobile, Fifth Wall team members can find company information, export and manipulate data, then share it with the team. The team goes into meetings well-prepared and ready to make the most of the time.

Building together

Real estate tech was still in its infancy when Fifth Wall was founded. In just about five years, the sector has expanded significantly. Today, Fifth Wall has approximately $3 billion under management with 100 corporate partners in over 15 countries.

"PitchBook was instrumental in helping us identify and build a compelling case for investors. PitchBook’s thought leadership really took a lot off our plates in terms of bringing recognition and validation to the space and growing the category,” said New.