Aldar Properties is investing in European venture capital firm Pi Labs' latest property technology fund which supports early stage start-ups in the sector around the globe.
Pi Labs’ Fund III, Europe’s largest early stage PropTech fund, attracted $90 million from a range of blue-chip institutional investors from around the world, including Abu Dhabi developer Aldar, Dutch pension provider APRG and London developer King’s Cross Central.
Through the investment, Aldar plans to tap Pi Labs’ network of early stage PropTech start-ups and gain “access to a market that attracted more than $17 billion in funding globally in 2021 alone”, said Maan Al Awlaqi, executive director for strategy and transformation at Aldar Properties.
Pi Labs' $90m investment platform, its third and largest, will focus on companies with innovative technology addressing challenges such as sustainability, the future of work and retail, robotics, the metaverse, industrial technology solutions, construction and smart cities.
These “ventures that are revolutionising the real estate sector and tackling priority areas for Aldar within its ecosystem”, are another area of focus for Aldar, Mr Al Awlaqi said.
“At Aldar, start-up investment is categorised within three funding platforms that form a key tenet of our innovation strategy: business ideas born internally, regional partnerships with incubators and accelerators, and PropTech focused investment funds,” Mr Al Awlaqi said.
Aldar, the UAE’s biggest listed developer, revamped its business early last year and adopted a new operating model with a parent company overseeing its core development and investment businesses.
In May, Aldar teamed up with US venture capital firm Fifth Wall to invest in a fund focused on supporting PropTech start-ups in Europe, and also unveiled its own inaugural accelerator programme to scout and invest in companies within this sector.
Mr Al Awlaqi said the Pi Labs' investment was "a stepping stone" on the company's "path to quickly and rationally asses investment co-opportunities in start-ups, with the view to launching pilot trials across our diversified portfolio, bringing next-generation technology and talent to Aldar and Abu Dhabi".
Mubadala, one of Aldar’s main shareholders, has also been actively investing actively in PropTech, participating in the $100m equity raise completed last year by London-based Plentific, another Pi Labs portfolio company.
Pi Labs latest PropTech fund, which was heavily oversubscribed, will identify the next generation of start-ups in the sector around the globe — from pre-seed to series A stage — with the average investment ranging from $500,000 to $1.5m per deal, plus follow-on capital.
The fund will focus on start-ups that have developed proprietary technology to enhance any stage of the real estate value chain.
Through this latest fundraising exercise, Pi Labs, which has a portfolio of 60 companies across 15 countries on four continents, is looking to almost double its portfolio to more than 100 companies by 2025.
The $90m investment platform is also looking to back the next global PropTech start-up valued at more than $1bn, with plans to make use of capital during later-stage rounds to turbocharge the scaling up of the sector’s most promising companies.
To date, Fund III has made 21 investments, including in US-based warehouse management platform Fulfilld’s $2.5m seed round, which involved former Amazon chief executive Jeff Wilke, London-based augmented reality start-up Dent Reality’s $3.4m seed round and Vienna-based sustainability company GreenPass.
“Raising close to $100m against the backdrop of the Covid-19 pandemic is unprecedented for a fund that primarily targets early stage PropTech ventures," said Faisal Butt, chief executive and Founder of Pi Labs.
"Our fund being 40 per cent oversubscribed positions us to deploy significant quantities of capital, alongside blue-chip institutions, into global markets where PropTech start-ups are reshaping real estate sub-sectors prime for disruption."