Fifth Wall co-founder and CEO Brendan Wallace says the tough times for property technology are over.
Property technology, or “prop tech,” uses software and technology to make real estate and property management easier. Like much of the real estate industry, it struggled in recent years.
High interest rates, a shrinking investment market, and a big focus on artificial intelligence hit the sector hard. While AI exists in prop tech, it hasn’t yet sparked widespread investor excitement in a field that has traditionally been slow to modernize.
“I’d say we just lived through probably the most challenging three years that certainly I’ve ever experienced,” said Wallace. “A lot of companies, startups, and venture funds died. It was an extinction event.”
Fifth Wall is a venture capital fund managing over $3 billion, making it the largest firm focused on technology for buildings and real estate.
Prop Tech Trends Are Rebounding
Wallace says the “winter” for prop tech is over. One sign of this is ServiceTitan, a cloud-based software for trades like HVAC, plumbing, and landscaping. Its IPO raised about $625 million, and shares jumped 42% on their Nasdaq debut.
Other new success stories include Juniper Square and Bilt, a platform offering loyalty rewards for housing.
Bilt raised $250 million in July at a valuation of $10.75 billion, backed by investors including General Catalyst and United Wholesale Mortgage.
“The destruction of value in prop tech from 2022 to 2024 was unprecedented,” Wallace said. “But the creation of value in the last 15 months has also been unprecedented.”
Climate Tech Faces Challenges
Not all areas of prop tech are thriving. Climate-related property technology is struggling because U.S. politics have shifted away from sustainability and climate-focused policies.
Many climate tech funds are having trouble raising money, and real estate owners are scaling back on sustainability, decarbonization, and ESG initiatives.
“Many climate funds are struggling to raise money, and real estate owners are deprioritizing sustainability and ESG,” Wallace said. “There is a negative sentiment in climate-related prop tech, even though our companies are still making progress.”
Despite national policy challenges, Wallace is optimistic because local governments are more proactive on climate. Cities, needing revenue, see carbon taxes as an attractive solution.
New York City, for example, is politically progressive and focused on environmental action.
Fifth Wall Leads Long-Term Investment
Fifth Wall continues to invest in climate-related prop tech, taking a long-term approach while valuations are attractive.
“My view is the real estate industry is still responsible for 40% of carbon emissions,” Wallace said. “Decarbonizing it will cost a lot, but capital is going to flow into that space. That’s why we’re still investing, even while others hesitate.”
The rebound of property technology shows that real estate is finally embracing innovation. Startups, software platforms, and new funding rounds signal growth and opportunity for investors looking beyond traditional real estate.
Author Profile
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The writer is a real estate journalist specializing in all types of New York City properties, including luxury residences, commercial spaces, and homes.
He also writes humorous articles about real estate, investors, and realtors.
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