Fifth Wall Ventures, a four-year-old, LA-based real estate-focused venture firm, has just closed a $100 million vehicle that it's calling its "retail fund." The vehicle comes hot on the heels of a $212 million debut fund that Fifth Wall closed in 2017, which was itself soon followed by a second, $503 million flagship fund. The firm is also reportedly raising a $200 million carbon impact fund.
So why raise more money via this separate pool? What does Fifth Wall even mean by "retail"?
We'd talked with firm co-founder Brendan Wallace a couple of weeks ago (Extra Crunch membership required) about the opportunity the firm sees. As Wallace said then, there are a growing number of venture-backed e-commerce brands that do -- or will -- rely heavily on physical real estate at some point. Fifth Wall -- which is backed by a long list of real estate heavyweights, including landlord giants like Macerich Co. and Acadia Realty Trust -- thinks it can play matchmaker. The idea is to introduce the startups to spaces owned by members of its investor base, while meanwhile enhancing the investors' properties by ensuring they have the latest and greatest brands as tenants.
Thanks to Fifth Wall, for example, Taft Clothing, a Salt Lake City-based brand, opened its first brick-and-mortar store in New York's SoHo district late last year. The building is owned by Acadia.
Fifth Wall has similarly helped another portfolio company, the men's apparel brand UNTUCKit, find some of its many locations across the U.S.
Even further afield, Wallace pointed to Fifth Wall's investment in the e-scooter company Lime. While the deal raised questions at the time about how Fifth Wall could rationalize the deal, "[W]hen you look at that business, a huge part of it depends on distribution to where consumers are, which is real estate assets and establishing charging and docking stations at those assets," Wallace said. "There is a huge real estate dependency to the scooter business [because you need a] network of charging stations, you need to structure relationships and deals with landlords and you also need to be able to deliver these devices in an organized way at these consumer endpoints at malls, office buildings and multi-family buildings."
Meanwhile, by working with Lime and installing docking stations, those same building owners are navigating around sometimes onerous parking requirements.
Kevin Campos, a partner at Fifth Wall, is the head of its retail fund.
In addition to Acadia and Macerich, some of its real estate backers include Cushman & Wakefield and Nuveen Real Estate.