VC Giant Plans $200M Fund To Back Real Estate Tech That Fights Climate Change

The biggest venture capital firm in PropTech is planning a fund to back firms that are creating technology that will help the real estate sector reduce its carbon footprint.

Fifth Wall said last week it is looking to raise $200M for its Carbon Impact Fund. It said the built environment is the single-largest contributor to global carbon emissions, and the sector needs to find a way to reduce its contribution.

The company said the fund would focus on four sectors: decarbonisation; climate resilience, which will look at ways buildings can prepare for future changes in the climate, such as increased heat or higher sea levels; the circular economy, which allows materials used to build and fit out buildings to be reused; and general tracking and reporting to help the sector measure its impact on the climate, the first step to improving performance.

Fifth Wall’s investors are typically large real estate companies, among them Hines, CBRE, Lennar, Prologis, British Land and Segro. It has $1B of assets under management. Its recent investments include leading a $35M investment in Homebound, a company that allows individuals to custom design their own home using a digital platform.

The company said 2020 could be a moment of reckoning for the real estate industry, where the wider public wakes up to the fact that the sector’s contribution to carbon emissions is much greater than demonised sectors like plastics or car transport.

“It’s a pitchfork moment: the industry needs to do something,” Fifth Wall co-founder and Managing Partner Brendan Wallace told Estates Gazette. “People will be looking at you and asking, ‘what are you doing?’ We don’t believe the real estate sector has a good answer to that. But when people realise how culpable the industry is, they will be angry, and they will want action.”