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.