DealmakingM&A / FundingProptechReal Estate Tech

Fundrise launches $1B investment fund

Fund targets everyday consumers with $10 investment minimum

Fundrise, an investment platform in the real estate industry, today announced launching a $1 billion venture capital fund as a part of their expansion into the tech industry. This “Innovation Fund” aims to make investments in real estate startups easier and affordable, and is expected to include late-stage VC and private growth equity investments, according to a press release shared with FinLedger.

Any U.S. resident can invest in this fund, and will cost investors a 1.85% flat management fee. Fundrise says each investor will be able to partake in the company’s growth equity and strategically benefit from it, considering the downturn in the tech industry. It argues that an individual, including unaccredited participants, can take advantage of the current investment economics before the cost of these valuations go up.

Fundrise co-founder and CEO Ben Miller says that while the industry is typically reserved for investments from large companies, taking the real estate route may help individual investors gain access to growth equities and venture capital, and avoid gatekeeping from fund managers. He says having spent a decade in the real estate industry, Fundrise will now test new waters in the tech world, where it plans to apply innovative measures the company has previously used.

“The approach we’re going to try to take is basically not to do what the traditional venture industry does, which is [to] hire a bunch of salespeople and analysts that really spend their time doing sales and meeting and trying to convince people to take their money,” Miller told TechCrunch. “That’s the old-fashioned way to do business. That’s how IBM used to do business 50 years ago, but that’s not how any SaaS company does business anymore.”

Its website lists “mid-stage, late-stage, as well as public technology companies” with “strong macro tailwinds, such as machine learning and artificial intelligence,” as their primary target for investments. Citing $2.8 billion in managed equity on behalf of 300,000 active investors on its platform today, the company says it now strives to make itself an “everything investment” platform, instead of solely focusing on real estate, according to the release.

The company also noted that all investment decisions for the fund will go through approval by a three-person committee, including Fundrise’s CEO (Miller), Chief Strategy Officer (Chris Brauckmuller) and Chief Operating Officer (Brandon Jenkins), and says it will target both new and existing customers.

In other recent proptech news, ApartmentLove acquired short-term vacation rental marketing platform Ready Capital also announced originating $1.2 billion in commercial real estate and small business lending volume during Q2.

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