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At last month’s Inman Connect New York, a Venture Panelist panelist talked about the term “dry powder.” This is a euphemism for available cash and was brought up in reference to the slow distribution of his capital to the venture.
or maybe not.
TechCrunch reports that the beginning of 2023 has been more active than many expected, stating: New capital commitment of $8 billion was made In the last week of January alone, contrarian activity took place. Bloomberg December report Its VC activity is at its lowest level in 20 years.
Funds in the news include two from New Enterprise Associates (NEA) totaling over $6 billion and two from Cowboy Ventures. total $260 millionFJ Labs has also announced two funds and is said to be stockpiling $260 million. TechCrunchSapphire Sport raises $181M in second fund, Volition Capital fifth round closes with $675M, Kearny Jackson raises $14M, Dimension raises $350M Did.
NEA funds iBuyer Opendoor and website builder Placester. Cowboy Ventures puts money into vacation home platform run away and fintech investment property lenders, KiabiFJ Labs backs real estate home equity lending providers. easy knock Boston-based Volition funds prop technology. little known During practice Agent However, it does not apply to large lenders and landlords.
TechCrunch This activity is believed to result from a previous relationship between the LP (Limited Partner) and the Fund.
“In part, they continue to work with certain managers because they have already put in the time and effort to build relationships with them, but there is often a long wait between investment and results. LP is hesitant to part ways with his manager, given one thing: the deal may be on the right track, but it’s not done yet.” TechCrunch Connie Loizos Said.
Fifth Wall, perhaps the most famous moneymaker focused on ‘built space’ or proptech, closed its $866 million fund in December. This is perhaps the first sign that venture capitalists are optimistic about proptech and the overall stability of his economy entering 2023.
In an interview with Inman, Fifth Wall managing partner and co-founder Brendan Wallace said he sees real estate technology approaching maturity.
“The landscape is broader, more sophisticated and more nuanced as these more mature companies become consolidators and companies that can drive M&A in this space,” Wallace told Inman. Institutional investors, i.e. the fund and its investors, are concerned about the growing impact of real estate on the economy and their funds.
“If you look at the growth of proptech, it’s actually outpacing the growth of fintech, which has been hugely profitable for venture capital, and it’s easy to see why,” he said. “Real estate accounts for a larger share of U.S. GDP than financial services and is a less technological sector.”
For Inman Access, Clelia Peters, Managing Partner of ERA Ventures and former President of Warburg Realty, joined David Eisnberg, Co-Founder and Managing Partner of Zigg Capital, to lead the venture capital market in 2023. We talked about the situation.
Eisenberg was largely positive, saying the fund would be more return-oriented, rather than “venture” focused.
“Venture capital is a subsidy for the overall innovation that’s happening in housing deals, and that subsidy is being withdrawn,” he said. I want to see .’ That’s generally a healthy thing to do.”
private equity firm Jordan Walton at Inman Connect New York in January bregal sage mount, said almost the same thing. He sees companies showing signs of long-term stability or needing cash quickly to avoid having to make tough decisions.
“It all comes down to the economics of these companies. The market is really saying profitability is the immediate priority over growth,” he said.
TechCrunch I also spoke with Sam Altman, CEO of OpenAI, which develops Chat GPT. Altman said that investors who were there during the good times of the past two years have left, meaning that those who have stayed are much stronger.
“When all the tourists are leaving, and all the people [were] Whether you started a startup, raised seed funding, or left because it was fashionable, this is when great value is created,” he said.
Peters himself hopes Altman’s view is correct. Her company is backing construction proptech her Welcome Homes with $29 million. The deal was finalized in the fall, but was announced in January.
The creation of a new fund is generally a good sign, but the pain may not be over yet, Eisenberg said.
“For at least the next few months, and likely the next few quarters, the major news coming out of the strong brand Proptech will be: [about] It’s more cost cutting than funding. ”
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