MetaProp Closes Second VC Fund, Raises $40M To Invest In Early Stage PropTech Startups
One of the industry’s leading PropTech accelerators, MetaProp NYC, closed its second real estate tech venture capital fund Tuesday at $40M.
The MetaProp Ventures II L.P. fund pooled money from a sweeping number of commercial real estate industry bigwigs, including Altus Group, PGIM Real Estate, RXR and global brokerages CBRE, Cushman & Wakefield and JLL’s PropTech division JLL Spark — all of which are limited partners in the new fund. Combined, the limited partners account for 15B SF across every asset class worldwide, giving startups a wealth of potential contacts to pilot and test their platforms.
“The space is evolving faster and better than it has in previous years; finally the interest and the recognition [is there] and the tide is starting to turn,” MetaProp NYC co-founder Aaron Block told Bisnow. “You’re starting to see organizations, corporations, asset managers, owners, developers, private equity and construction firms get behind innovation as a main driver of their business. The market is maturing and evolving.”
Founded in 2015, MetaProp raised nearly $5M in its first fund, which closed in early 2017, according to the company. Its newest fund will invest between $150K and $2M in up to 40 companies. The fund will target a myriad of early stage startups including Internet of Things companies, hardware and tech-enabled services and Software-as-a-Service startups within any market and for any asset class — so long as the startups are within their early stages and are focused on the built environment. This includes 3D printing, augmented and virtual reality, blockchain and digital energy management.
MetaProp partner and Head of Venture Capital Zak Schwarzman is heading up the new fund.
“Because of our unique position in the market, we are able to identify emerging PropTech opportunities and to invest with conviction early in a company's maturity," Schwarzman said in a statement.
Entrepreneur ‘Junkies’ and ‘Business Builders’
Startup accelerators, also known as seed accelerators, are mentorship programs that offer educational programs, connections within the industry, sources of capital and networking events to tech startups for a fixed period of time.
MetaProp’s accelerator is set apart from its peers in that its program is structured specifically for early stage PropTech startups — meaning these companies are moving toward their pre-seed, seed or Series A funding rounds. This is at times a difficult undertaking, Block said, as many of the concepts have not been fully baked upon entering the accelerator. But it is a challenge he said he and co-founding partners Clelia Peters and Zach Aarons happily face head-on.
“At our core, you have to remember that Zach and Clelia and I are business builders … we do early stage when others don’t [because] we’re junkies when helping entrepreneurs grow their business,” Block said. “One of the most important things I’ve learned is no matter how good [startups] are, what they expect their technology to be and their business to be in the beginning and what it ends up being are frequently entirely different. … You’ve gotta be ready for failure, for change [and] you have to be ready to have your whole world turned upside down.”
MetaProp has $40M worth of assets under management and a PropTech portfolio of more than 90 companies under its belt, including appraisal and valuation tech company Bowery, sublet listing website Flip, renters insurer Jetty and retail coworking provider Spacious. Startups that receive investment from MetaProp are not automatically accepted into its accelerator program.
“This fund will invest in 40 startups. A third of those, if what we’ve done historically plays out, will go through some sort of acceleration program at Columbia University,” Block said. “In almost all of [our] programs there is an investment component — that investment is made by the fund, not the accelerator. The accelerator does the hard work and the fund invests.”
Other accelerators in the commercial real estate space include Colliers PropTech Accelerator Powered by Techstars, which is a program specifically for new businesses that touch the property and commercial real estate value chains. Techstars is a global network that spans 150 countries and has more than 10,000 mentors under its umbrella.
Colliers’ intensive 13-week program, hosted at Colliers’ global headquarters in Toronto, will begin Sept. 10. Select startups for the program will focus on the development and acceleration of technology-driven solutions.
Dreamit Ventures is another fund and accelerator in the real estate tech space — though Dreamit also has programs for healthcare companies and tech startups within the logical, social and physical security space.
“There’s no one else in the world who does early stage PropTech,” Block said. “You have to really enjoy being around these folks who are in interesting times in their lives and creating new [solutions] as opposed to replacing old ones.”