The largest group of residential real estate owners and operators ever assembled by a venture capital firm will power the next generation of technology solutions
RET Ventures, an industry-backed venture capital firm focused on technologies for the multifamily, single-family rental (SFR), homebuilding and broader real estate asset classes, today announced the final close of its second fund. The oversubscribed $165 million fund will complement RET’s $109 million initial fund raised in November 2018.
The fund far surpassed its initial target of $130 million due to extremely strong investor interest. It is backed by RET’s growing base of Strategic Investors, including more than 40 leading multifamily and single-family real estate owners, operators and developers in North America who serve as technology development partners and customers for the startups RET invests in.
Participants in RET Ventures Fund II include affiliates of major multifamily real estate investment trusts (REITs) including Essex Property Trust, Inc., Invitation Homes, Inc., Mid-America Apartment Communities, Inc. (MAA) and UDR, Inc. and as well as private owners and managers such as BH Management, Bozzuto, Cortland, Edward Rose & Sons, Greystar Real Estate Group, Starlight Capital, Starwood Capital Group and Waterton. The group collectively owns or manages approximately 2.4 million rental units and includes 9 of the top 20 multifamily owners and 9 of the top 20 managers, as ranked by the National Multifamily Housing Council.
This growing group of real estate Strategic Investors, unique in their common asset class focus, helps RET identify pain points felt by institutional owners and operators that can be solved by technology. It also offers RET-backed companies and entrepreneurs the ability to more directly access the largest multifamily and single-family operators in the US, shortening their sales cycles and drastically increasing their rates of adoption. Finally, the collaborative partnership helps these Strategic Investors work with innovative startups that can greatly benefit their operations.
"Our mission at RET Ventures from the beginning has been to bring together entrepreneurs and the institutional owners and operators that power the $7 trillion multifamily and SFR industries to drive innovation and create a better, more efficient and more sustainable housing sector. After the great success of our first fund, we are excited to more than double the size of our Strategic Investor base in this new fund, which will enable us to further shape the future of real estate technology in the years to come," said John Helm, Founder and Partner at RET Ventures.
"Over 45 million US households live in rental real estate and the industry is in a rapid state of evolution, as the pandemic, the rise of remote work, rapid household formation and changing consumer preferences continue to alter where and how Americans live. As these dynamics play out, technology will play a pivotal role in reshaping the home and helping the industry adapt to a rapidly changing world," added Christopher Yip, Partner at RET Ventures.
"We have long recognized the incredible power of technology to not only optimize and differentiate multifamily buildings, but to shape the very future of the overall sector," said Tom Toomey, UDR Inc.’s Chairman and CEO. "We initially invested in RET Ventures in 2017 as one of the founding anchor investors, and have since realized enormous benefits throughout our portfolio through the adoption of leading-edge technologies aimed at generating operating efficiencies, better engaging with our tenants, and more quickly responding to the ever-changing needs of our business and customers. We are proud to mark a new chapter in that relationship by investing in the latest RET fund, and look forward to our ongoing role of helping to shape the development of rent-tech for years to come."
In addition to its deep base of investors throughout the multifamily sector, RET has continued to expand its reach across the real estate industry. The group of Strategic Investors now includes the two largest SFR operators — Invitation Homes, Inc. and Pretium (Progress Residential) — which together own / operate a combined 135,000 units, nearly 50% of institutionally owned SFR units across the U.S.
"The single-family rental market is experiencing a period of significant growth, both from renters who are increasingly untethered to dense urban centers and looking for more space, and from investors looking to capitalize on these emerging trends," said Invitation Homes, Inc. President & CEO Dallas Tanner. "Technology will play a critical role in this market as it continues to grow, as SFR operators stand to benefit greatly from tools that can streamline management and maintenance, as well as those that provide a worry-free experience for renters. We are proud to put our backing behind RET Ventures and support their work as they continue to identify and nurture the products that will fuel the evolution of both single-family rental and the real estate industry more broadly."
Since the launch of its first fund in 2017, RET Ventures has backed many of the most successful products in the rent tech ecosystem. As a result, RET Ventures Fund I has three completed / announced portfolio company exits to strategic and financial acquirers and is delivering top decile fund returns. Among its most prominent portfolio companies is SmartRent, a provider of enterprise smart home automation for property managers and renters. RET led the company’s Seed and Series A funding rounds, and has participated meaningfully in subsequent rounds, remaining the company’s largest shareholder. RET’s investments and strategic guidance of SmartRent has helped fuel the company’s growth from just 17 units in 2017 to more than 160,000 units in 2020. In April 2021, the company announced plans to go public via SPAC, with an initial valuation of $2.2 billion.
Other market-leading companies within RET’s portfolio include:
CheckpointID, deploying technology that verifies government-issued ID to reduce rental fraud; CheckpointID was recently acquired by MRI Software
Falkbuilt, a construction technology company that streamlines interior construction with its unique digital construction components technology
Funnel, the leading marketing and leasing software provider for multifamily owners and managers
GiGstreem, which recently closed a $50 million debt financing round to deploy building-wide Wi-Fi in multifamily properties
Kasa, a flexible accommodations company that partners with rental properties to increase their income streams
SightPlan, the multifamily industry’s premier provider of maintenance and resident service software
RET Ventures is headquartered in Park City, Utah.
About RET Ventures
A leading real estate technology investment firm, RET Ventures is the first industry-backed early-stage venture fund to strategically focus on helping build cutting-edge "rent tech" — technology for multifamily and single-family rental real estate. RET’s base of Strategic Investors includes some of the largest REITs and private real estate owner-operators and managers, who control approximately 2.4 million rental units. Through its deep expertise and connections within the industry, RET has created a unique real estate innovation ecosystem that delivers significant value to the companies it backs, providing them with access to thought leaders, development partners, and ongoing guidance. For more information, please visit www.ret.vc.
"Today, the multifamily investment and property management arenas are more competitive than ever, and technology represents a critical differentiator for companies like ours," said Cortland Founder and CEO Steven DeFrancis. "RET has distinguished itself as a leader in identifying and fostering the products that make a real difference for our operations and to the lives of our associates and residents, and we’ve been pleased to play a first-hand role in guiding many of their portfolio companies’ development. We are thrilled to contribute to their latest fund and look forward to leveraging their expertise as we continue to expand and improve our business."
Essex Property Trust
"As part of our long commitment to shaping the future of the multifamily industry via technology, we joined with several other leading REITs to help launch RET Ventures in 2017 as an anchor investor," said Michael J. Schall, President and CEO of Essex Property Trust, Inc. "Since then, we’ve seen tremendous returns from that commitment, and have found significant value in the ability to pilot many of RET’s portfolio companies’ products at our properties, and to offer first-hand guidance to help them address our pain points. With a growing group of players from across the multifamily and single-family segments participating in this latest fund, we are more confident than ever in RET’s ability to push the sector to greater heights."
"The pandemic, the rise of remote work and other societal shifts have increasingly placed the home at the center of daily life for millions of people. In doing so, these changes have underscored the primacy of the residential asset class," said Eric Bolton, CEO of Mid-America Apartment Communities, Inc. (MAA). "With the multifamily industry evolving faster than ever before, we remain extremely excited to be an anchor investor in RET Ventures and together play a critical role in shaping the future of the industry."
"We are proud to invest in RET’s latest fund, which will fuel further innovation in the sector and improve multifamily operations more broadly," said David Schwartz, Chairman, CEO and co-founder of Waterton and Chair of the National Multifamily Housing Council (NMHC). "RET has an established record of identifying and fostering products that uniquely address the needs of multifamily properties. We look forward to continuing our relationship and supporting technology's transformative impact on the rental housing industry in the months and years to come."
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