The Real Estate Tech Arms Race Continues With JLL Spark's New $100M Global PropTech Venture
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As the real estate tech arms race heats up between major commercial brokerages, JLL’s PropTech division, JLL Spark, has launched a $100M global venture fund to invest in burgeoning tech companies that will transform the industry.
JLL Spark Global Venture Fund will invest specifically in tech startups that aim to make real estate development, management, leasing and investing more efficient for real estate professionals, particularly JLL clients.
“The challenge for investors and occupiers … is that there are a lot of tech companies and products. It's hard to determine which are the right or most valuable ones. The JLL Spark fund will be the bridge between those two,” JLL Spark co-CEO Mihir Shah told Bisnow.
The fund will largely invest in seed and Series A funding rounds and the typical investment size will range from a few hundred thousand to several million dollars, the company said in a statement.
“[This is] a natural progression of where things have been heading for the past few years in CRE tech. If you are a brokerage firm and not investing in tech, you’re toast in this tech-dominated world. You won’t be able to retain and recruit. Your business won’t reflect how your clients are evolving their business. You won’t remain a leader in the industry. It’s that simple,” CRETech.com CEO and founder Michael Beckerman said.
Shah said the company is not searching for investment opportunities in any specific markets as of yet, though opportunities in major U.S. and U.K. cities may prove bountiful.
“Certainly the bigger the market, the better the opportunity of the startup. The reason it’s a global fund is because JLL is a global company. It makes sense for us to pay attention and find the best [investments] no matter where they are. If we have a startup in London or Singapore, we can do just as good a job helping them because JLL is global,” Shah said.
Helping Entrepreneurs Thrive
As commercial real estate tech continues to advance and new solutions make the act of trading and managing commercial properties more efficient, the trend of brokerages investing in property tech will continue.
JLL launched Spark in July with the explicit purpose of identifying, investing in and acquiring PropTech solutions globally that will benefit its clients, and its latest venture fund aligns with that mission. The business is headed by Silicon Valley tech gurus Shah and co-CEO Yishai Lerner. Both served as co-founders of Mob.ly — which was acquired by Groupon in 2010 — prior to launching JLL Spark.
“First of all, I am really happy for Yishai and Mihir. They have become good friends and frequent collaborators in the space,” MetaProp NYC co-founder Zach Aarons told Bisnow. “What I like about their model is that they are flexible. They have the ability to invest in companies directly, incubate companies, buy companies and invest in other funds. It’s really smart as there is no one way to engage properly with PropTech.”
Spark made its first acquisition in March when it purchased software-as-a-service platform Stessa ("assets" spelled backward) for an undisclosed price. Stessa specializes in facilitating portfolio management and offers valuation, performance benchmarking and other real-time analysis for investors.
Through its new fund, JLL Spark plans to leverage its deep roster of clients and many business lines to help startups scale by providing helpful feedback, opportunities for collaboration and aiding in the distribution of their products.
“Our goal is we invest in the company — they are their own [entity] — and we build the infrastructure to help them,” Shah said.
JLL Spark’s plan to help build that infrastructure is twofold: First, the company has established what Shah calls a growth team made up of product marketers and developers. These individuals will measure how well the startups are connecting with JLL and how much value their products are providing clients. Additional plans will consist of developing a network of building labs in the largest metros in the world to “fast-track the testing of new technology [and] help startups get really quick feedback on what [and how] their product is doing,” Shah said.
"Having been entrepreneurs ourselves, we know how hard it is to bring a new product to market, especially in an industry that has been slow to adopt new technology. That’s why our goal is to partner with entrepreneurs, and help them tap into the resources of JLL’s business lines so they can succeed in rapidly growing their companies while we also create value for JLL’s clients,” he said in a statement.