Greensoil PropTech Ventures of Toronto has launched its $100-million (US) Greensoil PropTech Ventures Fund II LP with significant support from some of Canada’s largest institutional investors. Its focus will be high-performing proptech companies which provide products, services, and technologies to make real estate more productive, efficient, and sustainable.
Among the participants in the fund’s first closing, which raised about half of its ultimate target, is the Ottawa-based Public Sector Pension Investment Board (PSP Investments). With $169.8 billion of net assets under management, PSP Investments manages a diversified global portfolio of investments in public financial markets, private equity, real estate, infrastructure, natural resources and credit investments.
Another major participant is an affiliate of Starlight Investments.
The Greensoil PropTech Ventures Fund II LP will invest entirely in the real estate and property technology sector, capitalizing on GSPV’s longstanding industry relationships, including many of its limited partners, to find and invest in emerging technologies. In many cases, prospective portfolio company solutions are piloted with one of Greensoil’s limited partners before the fund makes an investment.
Focused fund offers advantages
“As leading industry experts, we have been profitably bringing innovation and sustainability to the built environment for decades,” said Alan Greenberg, co-founder and chairman of GSPV, in the announcement. “Our diverse experience as real estate owners, developers and venture investors gives us an advantage unmatched by generalist VC firms. This unique vantage point will allow us to lead the industry’s adoption of the next generation of technologies – what we call proptech 2.0.”
The fund and the company are focused on early- to mid-stage venture capital opportunities in North America, Europe and Israel.
With approximately US$100 million under management, GSPV is backed by real estate and institutional limited partners to finance the digitization of the built environment, the biggest asset class on the planet. In 2015, Greensoil launched one of the world’s first venture capital funds focused entirely on the proptech sector.
Since that time, PropTech has become one of the largest and fastest growing venture capital segments, with close to US$25 billion of venture capital financing going to proptech companies in 2020.
“The initial closing of Greensoil PropTech Ventures Fund II comes at a time of significant opportunity and adversity for the real estate industry and the global economy and the need for innovation has never been greater,” said Kristopher Wojtecki, managing director, real estate investments, PSP Investments, in the announcement. “PSP’s partnership with Greensoil, and anchor investment in Fund II, reflects our confidence in their proptech leadership and investment track record.”
Greensoils supports sustainability efforts
The fund also reflects the fast-growing trend toward sustainability. Real estate companies with over $5 trillion in assets under management globally have signed on to net-zero carbon commitments by 2030 and 2050.
To help achieve these carbon reduction goals, the fund will invest in high-growth technology companies with an accretive business case to property owners, and strong environmental returns.
“From its origins of largely hardware-focused technologies to reduce facility operating costs, proptech is exploding into a myriad of technologies, leveraging the cloud, machine learning and SaaS business models to provide real estate-specific use cases,” said David Harris Kolada, managing partner of Greensoil and fund manager of GSPV II. “With our new fund, we will be financing opportunities resulting from the digital disruption of the entire real estate value chain.”
Harris Kolada, who joined GSPV in 2019, has a 25-year track record of investing and leading software and industrial technology companies.
Starlight founder and CEO David Drimmer said his rapidly-growing Toronto-based firm sees significant opportunity in the sector. Starlight’s entities have about $20 billion in multifamily and commercial real estate AUM.
“We are excited to partner with Greensoil PropTech Ventures to source, finance and deploy solutions into our buildings,” Drimmer said in the release. “We believe our commitment to GSPV Fund II will help us extend our market leadership and generate high investment returns.”