The road to net-zero is littered with the debris of broken promises, but Toronto-based Greensoil PropTech Ventures is steadfast in its commitment to decarbonizing the real estate sector.
This month, the company will be closing its $100 million PropTech Ventures Fund II (GSPV Fund II) after receiving a major investment from the Liechtenstein Group in October.
As a result, Greensoil will be able to fulfill its lofty proptech ambitions by funding start-ups in Canada, the U.S., Europe and Israel that deploy innovative technology, software, and AI to lower the carbon footprint of the built environment.
According to latest estimates, 39 per cent of global carbon emissions are produced by the real estate sector. Approximately 70 per cent of these greenhouse gases are generated by building operations, while the remaining 30 per cent are the result of construction activity.
Accordingly, investing in cutting-edge proptech companies is of vital importance to the overall goal of achieving significant emissions reductions in the real estate sector, the largest asset class on the planet.
Greensoil PropTech Ventures is one of Canada's leading players in the field, which over the last five years has seen over $100 billion of venture capital invested in North American companies.
Established in 2012 by Dutch-Israeli investor Gideon Soesman and Alan Greenberg, a long-standing Canadian real estate developer and former president of MintoUrban Communities Inc., Greensoil has embarked on a mission to "digitize and decarbonize the built environment."
The Toronto-based company targets mid-stage venture capital (VC) opportunities in the proptech sector which is rapidly transforming existing buildings into vastly more energy efficient, and hence profitable, properties.
"As impact investors, achieving net-zero greenhouse gas emissions and creating a more equitable world are our market-making missions," Soesman, co-founder and managing partner of Greensoil Investments, said.
"Greensoil Investments believes in the venerated Hebraic ideal known as 'tikkun olam' – that we bear a fundamental responsibility to repair and improve the world."
Greensoil gets vote of confidence from Liechtenstein Group
Greensoil PropTech's commitment to the greening of the real estate landscape led the Liechtenstein Group, an investment outfit owned by the Princely House of Liechtenstein, to partner with the pioneering Canadian VC fund.
This allows the company to embark on a new series of investments in cutting-edge tech firms to further leverage its sustainable real estate portfolio.
"The Liechtenstein Group is known for taking a thoughtful, holistic approach to increasing sustainability in real estate, agriculture and other key sectors," Soesman said. "We are pleased to work with an entity whose culture is so deeply rooted in sustainability and innovation."
The GSPV Fund II launched in March 2021 and has thus far committed three-quarters of its capital to investments in six proptech disruptors: Oxygen8, Wynd, Home365, Miru, Intelligent City and Ivy Energy.
Greensoil's investment selection process is governed by a strict corporate policy of funding only companies capable of "making a real contribution" to the UN's Sustainable Development Goals. Greensoil also practices due diligence to avoid greenwashing by ensuring its partners deliver regular progress reports.
Tech synergies and the overlap between proptech and climate tech
One of the central aspects of Greensoil PropTech's strategic vision is what Gideon describes as the "overlap between proptech and climate tech" in reducing a building's energy consumption.
"We're looking at making buildings energy independent, having better insulation of windows, having more fresh air, and areas like that," Gideon said. "What we've seen in the last couple of years is going from a system where you have a few very large energy sources that are all being transferred to the building environment, to a new setup where the building is generating its own energy by using alternative energy sources and then using those in a smart way.
"If at the same time you can lower the energy consumption and still achieve those same goals, then you have a double win."
Greensoil targets smart building systems, AI energy distribution
Greensoil's VC fund has been investing in leaders in the deployment of wide range smart building systems such as high-efficiency HVAC systems, AI energy distribution software and advanced building materials.
One such company, Ivy Energy, located in San Diego, Calif., pioneers software that tracks and bills corporate and residential tenants separately on the basis of how much of regular power grid energy they use versus solar energy usage.
"In the case of Ivy, it's providing vital technology with respect to the billing of energy consumption," Gideon explained. "If you have panels on your own standalone house, for example, it's simple. It's your energy and it's between you and the utility company. When you use the energy, you pay for the energy, or during those periods where you're using the solar energy, obviously you're not paying for it.
"But in cases where you have a larger building with multiple tenants, it becomes complicated because you need to determine and differentiate between who's using solar energy and who's using the regular energy when there's no sun outside. You need software to organize all of that and then to make sure that you can also bill the tenants in the building.
"That's what Ivy is enabling."
Greensoil takes stakes in Miru Smart Technologies, Intelligent City
Two Canadian projects which are outstanding examples of Greensoil's state-of-the art tech investments are Miru Smart Technologies and Intelligent City, both based in Vancouver.
Miru is bringing next-generation electrochromic windows to the residential and commercial real estate markets, blocking unwanted UV rays and controlling building temperatures with automated tinting. Miru's glass tech also extends the battery life of electric vehicles by reducing the energy needed to heat and cool cars, allowing vehicles to travel up to 10 per cent farther.
"In the case of Miru, by adjusting the tinting of the window, you can save a lot of energy because a lot of energy gets lost in the facades of the buildings and the windows," Gideon said.
Another target for Greensoil is modular construction. Vancouver-based Intelligent City employs a group of architects, designers and engineers who utilize proprietary software to create customized mass timber housing and commercial buildings.
"Modular construction is absolutely a core interest for us," Gideon said. "We do believe that we will see more and more modular construction because you can use more energy-efficient materials. This makes it both cheaper and faster to build and obviously it will be using less carbon in the whole process.
Proptech investing is 'an art'
Greensoil expects to a become one of the world's pre-eminent proptech players by continuing to provide the seed capital that will lead to a brighter, cleaner and greener built environment.
"We (intend to) invest more in earlier-stage, seed investments in emerging technologies, for example, stuff that is really new and where we want to make a smaller bet," Soesman said. "We do a lot of research on the different companies we invest in and . . . ultimately, we want to invest in the best companies and especially those that have excellent management.
"But in the end, as I always say, 'It's not a science, it's an art.' "