- The founder of NAR's venture initiatives has launched a fund that provides capital and strategic support to startups in verticals including the real estate, mortgage and home services industries.
- The fund has a partner roster of more than 200 investors, mentors and advisors that reads like a who's who of real estate.
- The fund is gearing up to pull the trigger on investments in some startups, but would not reveal how much money it's raised or plans to raise.
Real estate tech startups will soon be jockeying for a new potent source of funding and strategic support — if they aren’t already.
Moderne Ventures — an early-stage venture fund launched by the woman who founded the National Association of Realtors’ (NAR) venture initiatives — is pulling together funds and a far-reaching network of industry partners to shovel capital and strategic support behind startups innovating in the real estate, mortgage, finance, insurance and home services industries.
The investment fund and its startup accelerator build on a model pioneered by Constance Freedman during her tenure at NAR, where she spearheaded the trade group’s venture initiatives, Second Century Ventures and the startup accelerator REach.
Both initiatives leveraged NAR’s vast network to connect companies with a wide range of mentors and potential customers, offering supported startups the opportunity to cast a wide net across the real estate industry.
Second Century Ventures and REach
Second Century Ventures has made investments in a range of real estate-related companies, including a highly lucrative bet on DocuSign. Second Century Ventures purchased a 5.43 percent stake in DocuSign for $2 million in 2009.
DocuSign was valued at $3 billion in its most recent funding round. After selling some of its stake in DocuSign, Second Century Ventures owned 4.5 percent of DocuSign in 2014, according to NAR’s 2014 finance committee report.
(NAR did not immediately provide an update on whether Second Century Venture’s ownership stake in DocuSign has changed.)
Startups that have enrolled in REach, which doesn’t offer funding but connects enrollees to a phalanx of big-shot mentors, have collectively raised tens of millions of dollars. Graduates include SmartZip, Updater, BombBomb and The August Smart Lock.
The next venture
Moderne Ventures will “broaden the vision” of the venture model Freedman cooked up at NAR by focusing on companies that have applications in several verticals related to homeownership, including the mortgage, finance, insurance and home services industries, not just real estate.
DocuSign is an example of a firm that would fit that mold, she said. The firm’s digital forms and signature technology is used across many business verticals.
The types of companies that Moderne Ventures will consider backing include those that deal in business software, predictive analytics and big data, smart home tech, artificial intelligence, drones and financial tech, she said.
Moderne Ventures also recently announced the launch of a startup accelerator that closely resembles the accelerator that Freedman founded at NAR, REach. “Moderne Accelerator” will incubate startups from the same industries hovering in the crosshairs of Moderne Venture’s venture fund.
Slated to kick off in January 2016, the accelerator will nurture startups for seven months. Enrollees will not co-locate.
“Our target companies have established their product/market fit and are now ready to execute,” Freedman said in a statement about Moderne Accelerator. “We help them execute by providing an expeditious way to learn the markets, make all the right connections and launch into our core verticals.”
Freedman declined to reveal how much money Moderne Network’s venture fund has raised or its initial fundraising goal, but said that it was “looking at pulling the trigger soon” on some investments.
Strategic investors in Moderne Ventures include a major franchise, a large MLS, big regional brokerages and a number of individuals, according to Freedman.
The fund’s partner network, which includes investors, mentors and advisors, reads like a who’s who of real estate.
- Better Homes and Gardens CEO Sherry Chris
- Century 21 CEO Rick Davidson
- Coldwell Banker CEO Budge Huskey
- Former chairman of the board at realtor.com operator Move, Joe Hanauer
- Realogy CEO Alexander Perriello
- Joel Singer, CEO of the California Association of Realtors (CAR)
Though none are featured on Moderne Venture’s website, active employees of listing portals are “well represented” on the fund’s partner roster as well, Freedman said.
She declined to name any partners employed by listing portals because she hadn’t secured their permission to be named.