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Today: December 5, 2024
March 8, 2024
3 mins read

Do Strategic VC Investors Still Add Value?



TLDR

– Prudence, a PropTech focused venture capital firm, raised $80 million for its next fund
– Prudence does not disclose information about the companies that have invested with them

Are Strategic VC Investors Still Considered an Asset? – Propmodo Newsletters Technology Subscribe Search Propmodo Categories Technology Real Estate Buildings Workplace Development Perspectives Events Propmodo Live Hot Topics Multifamily Energy Management Lending Urbanism Commercial HVAC Architecture More Subscribe Personal Reading List Propmodo Research Subscribe Advertise Contact About Us Cookies Log In © 2024 Propmodo Inc. All Rights Reserved. Notification Font Resizer Aa Font Resizer Aa Newsletters Technology Search Propmodo Home Subscribe Newsletters Technology Research Webinars More Reading List Advertise Contact Sign In Sign In Follow US Copyright © 2024 Propmodo Inc. All Rights Reserved. Propmodo Daily Are Strategic VC Investors Still Considered an Asset? By Franco Faraudo March 7, 2024 Share The Voice of Commercial Real Estate Innovation Subscribe to Propmodo’s email newsletters for daily commercial property insights and updates that you won’t find anywhere else SIGN UP A PropTech focused venture capital firm named Prudence just announced that it has raised $80 million for its next fund. This announcement isn’t huge news in the real estate space; at $80 million, this fund would be somewhat small in the grand scheme of the venture investment world, and Prudence is a newer, somewhat lesser-known PropTech investor. But there is one difference between Prudence and all of the other strategic PropTech venture investors that have come before it. Prudence doesn’t list any information about the companies that have invested with them. They even went as far as to declining to name the investors they have partnered with, instead relying on a vague statement: “We have a really great investor base that’s made up of a combination of institutions, family offices, high-net-worth individuals, and I think, importantly in the sector we play in, strategic capital as well. We were happy to have the support of a lot of our existing investors and then a handful of new investors to sign up for this one as well.” So, if Prudence has such a great investor base full of strategic capital, why would they not want to sing it from the rooftops? All of the other VCs in the space, like Fifth Wall, MetaProp, RET Ventures, Camber Creek, Moderne Ventures, and Alpaca, plaster their strategic partners all over their websites. The reason seems obvious: what PropTech company wouldn’t want a large potential client as an investor, even if it has to go through a fund manager? My suspicion is that Prudence’s silence about their investors is a strategic choice. As nice as it might seem to have a large property company as an investor, I have heard from many founders that it can actually be quite limiting. If a company gets known as “CBRE’s investment” or “Greystar’s platform” then other property companies might not want to use them. This is also why I think we are not hearing about as many direct investments from property companies into startups. Strategic capital can be a great way to bring industry expertise into a technology company. It can also be a good way to gain customers and, hopefully, brand champions. But as much as it might help get sales off the ground, it could end up limiting the size of the total addressable market. Real estate is a very defensive industry and sometimes companies would rather forego trying a new solution rather than supporting a competitor. While strategic investments from established players will likely continue flowing into real estate technology companies, these funding sources may become less prominently publicized. Insider Insights 🕵️ Additional investigation: North Carolina’s Attorney General has started an official investigation into RealPage and “whether this company’s operations violate the law and raise rental costs for residents.” 🏰 Euro trip: The EU’s central bank has decided to keep its interest rates steady citing wage growth as a growing concern for inflationary pressure. Overheard Asking rents make all the headlines, but they’re only for new leases– so they don’t reflect what the average current renter actually pays. For that, we look to the in-place rents, i.e. the rent roll. Like the CPI’s shelter measure of “contract rents,” in-place rents lag asking… pic.twitter.com/kjDcnq5O7K — Jay Parsons (@jayparsons) March 7, 2024 – Advertisement – More Email Newsletters → Propmodo Technology No One Wants a Twenty-Floor Walk-Up March 7, 2024 Propmodo Daily How Has Austin Been Able To Build More Housing Than Anywhere Else? March 6, 2024 Propmodo Daily Yardi Price Fixing Lawsuit Is Weaker Than RealPage’s but May Be Just as Harmful March 5, 2024 Propmodo Daily Institutional Investors Are Changing the Affordable Housing Bond Market March 4, 2024 Propmodo Daily Pushing the “Nordic System” of Heating and Cooling in the U.S. March 3, 2024 Follow Propmodo Subscribe Advertise Contact About Us Cookies Log In © Propmodo, Inc. 2024 Welcome Back! Sign in to your account Username or Email Address Password Remember Me Register Lost your password?


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