$5B Construction Company's Venture Capital Affiliate Raises $110M To Invest In CRE Tech
Suffolk Technologies, a venture capital firm affiliated with $5B national construction firm Suffolk, has closed its first fund, earmarking $110M toward innovation in the real estate industry.
The $110M in commitments will go toward startups across proptech and construction technology. Suffolk said it plans to target early stage to growth-stage companies innovating in efficient infrastructure, reducing high emission rates from construction and addressing the lack of affordable housing across the country.
“Construction and real estate continue to lag behind other industries when it comes to innovation and the use of technology and data,” Suffolk Chairman and CEO John Fish said in a press release. “The time is ripe for disruption.”
Suffolk Technologies has made over 30 investments to date in companies including OpenSpace, Airworks, Kojo and Canvas. It also runs the BOOST Program, a six-week accelerator program for proptech startups. Companies that have graduated from the program have raised $350M in capital.
Some proptech companies are finding success from acquisitions and securing funds. Apex Group this month acquired Retransform, a real estate company that offers proptech and tech-based solutions to customers. The acquisition allows Apex Group to support real estate investment funds across their entire life cycle. On the heels of a $43M fundraise in December, proptech firm Setpoint acquired due diligence provider Resolute Diligence Solutions in May. Software platform Inspace, which showcases properties virtually and in 3D, closed a $6M Series A raise this week.
But overall, the proptech market isn’t performing as positively as in previous years.
During the first half of 2022, $11B was raised in proptech funding. This year, however, that number was reduced to $4B. Additionally, proptech jobs grew by 10,000 in 2022, but this year, companies are reducing their workforce.
For example, proptech company Latch, which specializes in building management and smart locks, is laying off over half of its employees, or 82 positions, after previously laying off 130 employees in May. Spatial data company Matterport plans to cut employee numbers by 30%.
The proptech pain in many ways mirrors the larger tech environment. Other tech companies laying off workers include Crunchbase, Microsoft and ClickUp, joining Spotify’s June announcement and Meta’s in May, according to TechCrunch.