This November, Inman offers a deep dive into the world of proptech and the state of the startups that are building the future now. In addition, our coveted set of awards, Proptech All-Stars — celebrating the entrepreneurs, VCs and visionaries in the world of proptech — returns. It’s Proptech Month at Inman.
A collaborative real estate investing platform called Fractional has closed on a Series A venture capital round of $15 million, according to a press release sent to Inman.
Fifth Wall led the funding, which brings Fractional’s total funding to date to $20.55 million. Left Lane also participated in the latest round, the release stated. The funds will be used to expand the product, hire and broaden its education initiatives.
Fractional was reviewed by Inman in 2023 and earned high marks for its ability to broach the most challenging aspects of putting money into real estate: where to start. The solution also provides younger, aspiring home buyers still priced out of the market a way to take part in the real estate economy. It was founded in 2021.
Its educational arm, Elevate, is an accelerator program to help create “matches” between people and properties. It’s 12 weeks of courses total, five of which are curriculum-focused, and its goal is to take accepted participants from “interest to investor” in 90 days.
“For the average American, the path to purchase investment real estate is an arduous one. It is guarded by little accessibility due to the high cost of entry, which makes it extremely hard to take the initial step, let alone imagine the financial as well as personal growth opportunities that come with real estate ownership,” said co-founder Stella Han in the press release.
“We are grateful for Fifth Wall and our other investors’ partnership, as we enter into this phase of strategic growth.”
Fractional members work in teams on real estate investing projects, in which one may handle market research, another lease-up and another financing. The company then assists its user teams with legal entity creation, banking, admin and accounting oversight.
“This is what makes Fractional a powerful platform to learn and find business partners,” the release stated.
Fifth Wall’s influence on innovating real estate is hard to understate. It’s been pushing heavily into decarbonizing the space from foundation to rooftop by backing alternative solutions to slow, resource-intensive building and operating practices. It raised a $500 million Climate Fund in November 2022 and the next month another $866 million to target a broader subset of real estate innovators.
Fifth Wall has also backed proptechs Lessen, Veev, Flyhomes, Sundae and Hippo, among many others.
Han’s co-founder in Fractional, Carlos Treviño, said in a statement that the company’s overarching theme is to “divide and conquer.”
“We are here to take ownership of our financial future, to unlock our individual skills and unleash our collective, joint-investing power. We want a personal stake, not just a monetary one,” Treviño said. “That is why we are breaking things up, alleviating the burden, and sharing the load to achieve our mission of making real investments manageable and real wealth attainable.”
The level of interest VC firms have in startups hasn’t been particularly noteworthy in 2024, Inman found.
Total proptech venture capital investments hit just $1.491 billion in the first quarter of 2024 — a 12.4 percent year-over-year decline from $1.7444 billion in Q1 2023, and a far cry from a peak of $7.444 billion tallied in the first quarter of 2022, data from the Center for Real Estate Technology and Innovation shows.
Bright spots in proptech where investors remain optimistic include companies innovating with AI or those finding solutions to transition away from fossil fuels and unsustainable building practices in the face of ever more robust federal regulations in these sectors.
However, Era Ventures, founded by frequent Inman event panelist and contributor Clelia Peters, closed on an $88 million fund in September, a record for a woman-led fund.
Other notable rounds of funding this year include Perchwell’s $25 million Series B, PayHOA’s $27.5 million Series A and investing app Backflip’s $15 million Series A.
