With 2 separate $400m investments yesterday, SoftBank goes hard on real estate

SoftBank led not one but two $400m investment rounds in real estate startups yesterday.

September 28, 2018

Yesterday, SoftBank’s $92B Vision Fund led 2 separate $400m investments in home-flipping and property management startups. 

By literally doubling down on the real estate industry, the Japanese megafund has gotten real about the trendiest, and worst-named, sector in real estate: Proptech (AKA new, data-driven real estate tech companies). 

So who were the lucky winners?

Opendoor, a $2B real estate startup whose door was already open wide thanks to a $325m funding round it raised just 3 months ago, pulled in another $400m from SoftBank to expand beyond its 19 existing markets.

Compass, a larger $4.4B platform that raised $450m less than 1 year ago at a $2.2B valuation (also SoftBank), pulled in $400m yesterday from SoftBank’s Vision Fund and the Qatar Investment Authority. 

Both companies have grown rapidly by automating inefficient parts of the antiquated real estate brokerage process — and SoftBank’s been watching.

Prop till you drop

Things are getting real (estate) at SoftBank: The Fund has dropped $8B into proptech companies since 2017. Since SoftBank refuses to invest less than $100m, the $228T global real estate industry is one of the few industries big enough for the world’s largest tech investor. 

More importantly, the market is fragmented: America’s largest real estate services company, Reology, has just 1% market share.

Dozens of other startups —  Zumper, PeerStreet, Buildium, Redfin — have raised tens and hundreds of millions to build proptech platforms. If any make it big, SoftBank will be waiting with hundreds of millions of dollars.

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