One of the most active proptech and climate tech venture capital vehicles is taking a significant step back.

Fifth Wall has reduced its headcount and suspended fundraising, according to Axios. The VC firm has more than $3B in commitments and assets under management. It has companies like property management startup Lessen, solar software company Aurora, leasing platform VTS and storage marketplace Neighbor in its portfolio.

Fifth Wall didn’t specify how many employees it let go and didn’t respond to a request for comment.

The proptech firm cited interest rates and shifting climate policy from the Trump administration as deciding factors in the reductions.

While the Federal Reserve cut interest rates three times in 2025, putting the federal funds rate between 3.5% and 3.75%, proptech was already on shaky ground because of three years of rate hikes. VC firms pulled back starting in 2022 and reduced spending by 42% in 2023. A wave of companies, like Zeus Living and View, went bankrupt or shuttered.

2025 seemed to be a turning point. April was the first month in years the sector raised more than $1B, and in December, the sector raised $4B, its best-performing month ever. Proptech closed out the year with more than $16B in investments, according to Center for Real Estate Technology & Innovation data.

Fifth Wall CEO Brendan Wallace said coworking firm Industrious' acquisition by CBRE in January 2025 inspired him to launch a new flagship fund, taking that as a sign of momentum building in proptech. Fifth Wall was the first VC firm to invest in Industrious.

Fifth Wall launched React with a $500M target that month. Commitments came in from Ryman Hospitality, Kite Realty and Federal Realty Investment Trust, among others. The fund had raised $123M by December.

Also in 2025, Fifth Wall co-led two funding rounds, one for $50M with QED Investors for vacation rental startup Wander and another for leasing platform Vero with Sunriver Capital.

However, Fifth Wall’s other sector, climate, is under the strain of President Donald Trump’s rollback of policies and incentives for climate-related projects. Nearly $8B in clean energy manufacturing investments were canceled or scaled back during 2025’s first quarter.

Fifth Wall was launched in 2016. It has more than 100 limited partners across 20 countries, including Hilton, Starwood, Related, British Land and Hines.