JLL is betting big on property technology with the formation of a new fund.
The property services company has created JLL Spark Global Venture Fund to invest $100 million of JLL’s capital in early-stage proptech companies, according to a Tuesday announcement.
Investment sizes will range from a few hundred thousand to several million dollars, and the fund has already made two investments, Mihir Shah, JLL Spark’s co-chief executive, told PERE. He said the fund allows JLL to invest globally across categories of commercial real estate-focused start-ups, as well as build relationships with the start-up teams.
Shah leads San Francisco-based JLL Spark with Yishai Lerner. The co-CEOs previously founded a mobile development company that they sold to Groupon in 2010 and have also worked as angel investors and start-up advisors.
“Start-ups are approaching our clients from everywhere around the world,” Shah said. “Having spent 20-plus years developing products, you develop a certain expertise in separating the wheat from the chaff. That’s the kind of value we hope to bring.”
The fund benefits from JLL’s company-wide focus on technology, Shah said. JLL Spark can connect start-ups with JLL’s clients and services to test products, and JLL can educate its clients about the value of technology.
“In this space, start-ups have had a hard time with deployment cycles because people are slow with technology adoption,” Shah said. “On the other side, you have JLL’s clients and services. It’s clear there are a lot of technologies coming on board, and this helps them understand how to invest. We see the fund as the bridge between the two groups.”
In March, JLL Spark acquired Stessa, a software-as-a-service real estate technology platform created to help investors track, manage and communicate the performance of their portfolios. In the future, Shah said JLL Spark may acquire other existing operating businesses, in addition to its investments through the proptech fund.
Other companies, including alternative investment firm Brookfield Asset Management and venture capital firm Fifth Wall Ventures, have also launched proptech funds in recent years. JLL Spark’s vehicle is positioned to do earlier-stage investing than Brookfield’s fund, and Shah noted that JLL Spark-funded start-ups could “graduate” to receive further funding from Brookfield.
Los Angeles-based Fifth Wall, unlike JLL Spark, invests across the full spectrum of real estate technology, including residential and construction technology that is less relevant to JLL’s company focus.
“If we can’t add value, then it doesn’t make sense to invest,” Shah said.