Early-stage proptech startups have a potential new source of capital at 1Sharpe Ventures, which recently closed its $ 90 million inaugural fund.
Roofstock co-founder and chairman Gregor Watson and real estate investor Rob Bloemker founded the company in 2021 and closed for the first time last year. The couple claim that the fund was “over-subscribed”. For the uninitiated, Roofstock is the online marketplace for investing in rented homes, which raised $ 240 million in March at $ 1.9 billion.
Oakland, Calif.-Based 1Sharpe Ventures was born out of the couple’s further efforts, 1 Sharpe Capitalinstitutional asset manager with real estate investments and a loan fund.
The new company will invest in 30 to 40 early stage companies in the world of real estate technology with check sizes ranging from $ 500,000 to $ 2 million. Specifically, it focuses on pre-preparation for companies in the A-series phase. Half of the total amount raised – $ 45 million – will be set aside for subsequent investments, according to Watson.
So far, the company has made five investments and supported startups such as Cottage and FlockHome construction technology startups.
When looking for potential investments, 1Sharpe focuses on three categories: financial transactions and access to capital; human capital in real estate; and data and intelligence. For example, 1Sharpe is interested in creating financial products that make real estate fairer and that can “create opportunities for economic mobility”.
“We believe that buying and owning real estate can be much more efficient and that the environment in which we live and work should be healthier, more sustainable and more enjoyable,” said Watson.
Watson and Bloemker have jointly established and built nine real estate and technology financing platforms, including Roofstock, Dwell Finance, Lessen, Azibo and Creative Juice. Together, they have invested more than $ 8 billion in real estate and technology platforms and portfolios, including construction loans, multi-family investments, single-family rentals and land development.
Watson believes that this experience gives 1Sharpe the advantage that the company can offer its portfolio companies more than capital.
“We are sitting in a unique place where we really understand capital markets and real estate. We’ve done billions and billions of dollars in real estate transactions, but we’ve also built a number of fast-growing technology companies to understand and translate the two worlds, “Watson told TechCrunch. “And I think it gives us a competitive advantage because we can help those companies that have really smart technologies who don’t understand capital markets and vice versa.”
It was a logical step for Watson to become an investor after he found out that he spent about 60% of his day meeting with founders and other venture investors.
“I have a real passion for building businesses and working with entrepreneurs. And that’s where I wanted to spend my time, “TechCrunch said. “I like helping people go from zero to one. I like to see ideas come to life. ”
And his vision is long-term.
“I’m excited to be able to spend more time with entrepreneurs and really get to know them. This is a long-term relationship, isn’t it? You get married and invest in these businesses, “said Watson. “And having a rifle marriage doesn’t always end in the best result.”
Today, 1Sharpe Ventures has five employees. Ginny Miller serves as the director and oversees investment strategy and implementation. Feng Wang is the Head of Capital Markets at 1Sharpe and a former founding member of the LendingHome team. Its goal is to help portfolio companies optimize their strategic capital structure. Vice President Kathleen Collins will focus on sourcing and conducting due diligence on potential new investments.
In terms of time frame for investment, 1Sharpe is “very patient,” Watson said.
“During the last downturn in 2008, I learned that patience is a virtue … and we want to stay patient because we think we’ll see how many great talents leave some of the bigger technology companies and start their own things.” “he said.
As such, Watson expects the company to invest the first half of its fund within the next two to three years.
“The best thing about this downturn is that it reminds entrepreneurs to focus on burning – go back to – ‘what are the unit economies’ like Business 101, and then go and change the world with technology,” he said.