LAB Ventures to launch PropTech rolling fund next month
Just this morning. Loft, a Brazilian startup that streamlines the real estate buying and selling process, announced it raised $425 million. That a three-year-old startup reaped one of that country’s largest venture rounds ever is a sign of just how red-hot the proptech sector is globally, which saw nearly $24 billion flow into proptech companies during 2020, despite the pandemic. Locally, the sector has been gaining steam, too: As measured in deals in dollars, proptech was a top performing sector in South Florida venture capital last year.
Now, Miami will have a proptech fund, too. Today, LAB Ventures is announcing it is launching a new rolling fund, the LAB PropTech Fund. The fund will be launching April 1 on the AngelList platform. Rolling funds, a relatively new fund structure, allow new investors to join the fund each quarter, and give both investors and fund managers increased flexibility.
The fund will be managed by Tigre Wenrich and Rafael Valdivia (pictured above), who have been running the proptech-focused venture studio at The LAB Miami in Wynwood, the city’s original co-working space. The LAB’s partners Marco Giberti, Juan Pablo Cappello and Eduardo Barco will also be partners in the fund, and real estate industry insider Tom Roth of Grass River Properties, who is formerly an executive for Hines, will be a special advisor to the fund.
Wenrich is the former COO/CFO of OpenEnglish, involved in all of the venture-backed company’s funding rounds. As well as running LAB Ventures, he has been an active angel investor for years. He met Valdivia a few years ago through Miami Angels, South Florida’s largest angel investing network. Valdivia brings a fund management background. He worked for a large asset manager in Brazil before coming to Miami and since moving here he has been a real estate developer and has become interested in startup investing. “It was the perfect fit,” Wenrich said.
Wenrich and Valdivia will be looking to invest in seed-stage tech companies with innovative tech solutions for the residential real estate and construction sectors. The fund managers want to see an MVP and strong team, but don’t require a revenue threshold. The fund will be open to startups from anywhere in the world, but Wenrich expects most will come from the U.S., including the Miami area, and Latin America. Most investments will be in the $250K to $500K range, he said.
Plans for the fund have been in the works since 2019, and the pandemic caused a slowdown getting the fund off the ground. Yet it also gave the fund’s managers time to build up a strong pipeline, and Wenrich said he is excited about the deal flow they have already been seeing. That deal flow includes startups disrupting the way traditional residential real estate works by making buying and selling easier, as well as new companies in construction tech – tech solutions geared to finding efficiencies in that massive global industry that is also a top industry locally. Wenrich sees lots of synergies between construction tech and Miami, with a number of larger players in the industry here looking to bring more innovation to their projects
To see what kind of startups the fund may be interested in, consider the companies the partners have placed bets on previously: Two of them are LAB Ventures’ stand-out portfolio companies – Expetitle, an online title company, and Beycome, a digital real estate agent – both startups that raised seed rounds during the pandemic. In construction tech, one of their investments is SmartBarrel, a Miami-based startup that provides a real-time job tracking solution. Other proptech companies the partners have invested in include Bricksave, a British company with an investment platform for emerging market real estate investors, and Node, a Seattle company that does pre-fab construction of backyard cottages, as well as Knowify, out of New York, and LAB Venture companies RentCaddy and Lumi.
Rolling funds first came on the scene in early 2020, and they allow new investors to join the fund each quarter and gives them more flexibility. For LAB Ventures, the new model also makes a lot of sense, Wenrich said. With a traditional fund, “it’s an 18-month process to raise a fund, even a small one,” Wenrich said, and when it’s time to raise another fund, fund managers have to stop everything to raise again, an inefficient process. With a rolling fund, fund managers can be constantly fund-raising and constantly investing.
“It’s also a much better way to get started, being our first fund. We were anxious to get into the market — we’ve been talking about this for a long time and Covid was a little bit of a setback. But we’ve built a great funnel of potential investments and we are eager to get to work on those,” Wenrich said.
Investors in the new rolling fund can commit a minimum of $25,000 per quarter, and the LP pool is expected to come largely from the real estate and construction industries, including real estate developers and investors locally and from LatAm. They will provide strategic value to the investment portfolio by piloting, vetting and potentially becoming customers for the solutions, and they reap strategic benefits by staying at the forefront of their industry. “We’re also talking to private individuals and family offices in Florida and a bunch of folks in Latin America,” Wenrich said.
Find out more about the fund here.
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