Mihir Shah and Yishai Lerner, co-chief executives, are on a mission to transform the real estate industry through technology-based innovation. They lead the $100m JLL Spark Global Venture Fund, the corporate venturing representative of real estate developer and property manager JLL. It has made early-stage property technology investments since its launch in June 2018, evidenced by its first two investments made in real estate technology-focused accelerator program Metaprop and real estate technology-focused late-stage investor Navitas Capital.
Shah said: “2018 was a landmark year for JLL Spark. We launched the $100m global venture fund and invested in 10 proptech startups serving all facets of the commercial real estate lifecycle. We are looking forward to seeing what the coming year has in store as we continue to open doors with JLL businesses and clients for our existing portfolio, while making new investments in promising technology startups in America, Europe, the Middle East and Africa (Emea), and beyond.”
JLL Spark said in a statement: “While technology has transformed many traditional industries across the business world, the real estate industry has not been as quick to evolve. However, that is changing. Investments in real estate technology companies grew 25% in 2017 to $3.4bn [according to CB Insights], and while many entrepreneurs are trying to build proptech companies, distribution remains a challenge along with long sales and deployment cycles.
“Enter JLL Spark, a division of JLL. Most corporate ‘innovation’ or venture arms lack the ability to achieve results at speed due to required adherence to standard corporate process. However, JLL has structured JLL Spark to operate independently and without typical constraints, providing the nimbleness of a startup backed by JLL’s expertise and resources.
“The JLL Spark entity complements JLL, allowing JLL’s core business to be more productive and drive competitive advantage. Led by Mihir and Yishai, who have successful track records building and investing in tech companies, JLL Spark’s strategic proptech investments offer JLL the ability to provide innovative products to real estate owners and operators.”
After Shah and Lerner launched JLL Spark’s Global Venture Fund, which plans to finance companies focused on technologies from real estate development and management to leasing and investing while enhancing the experience of those who occupy it. The fund has also pledged to help entrepreneurs and their companies by connecting them with JLL’s business lines and clients for insightful feedback and distribution of their products. The new fund focuses on seed and series A investments, as well as select later-stage rounds.
Having been entrepreneurs themselves, Mihir and Yishai know firsthand how difficult it can be to bring a new product to market, especially in an industry that has been slow to adopt new technology. Therefore, their goal is to partner entrepreneurs and help them tap into the resources of JLL’s business units so they can succeed in rapidly growing their companies.
JLL Spark recently announced that it has selected UK-based proptech-focused platform Concrete VC Proptech as its investment adviser in Emea to help expand its reach and make strategic proptech investments in Europe especially. While the bulk of investments to date have been in the US, one is based in the UK and another in Israel, and it plans to make more investments in Emea and Asia-Pacific over the next year.
Under Mihir’s and Yishai’s leadership, JLL Spark has made 10 strategic investments since the launch of their Global Venture Fund. Public deals in which JLL Spark was involved last year, with cheque sizes from $300,000 to several million dollars, included a $18m series A round for Israel-based real estate investment technology developer Skyline.ai in August and a $1.5m series A round for US-based real estate-focused sensor-as-a-service platform provider VergeSense in October.
Its activities were particularly busy in September, having invested in a $6.6m seed round for tenant experience platform provider HqO, an $8m series A round for property investment management platform creator Dealpath, an extension for a $30m series B round for real estate-focused project management platform Honest Buildings – making its total funding $50m – and a $2.8m seed and series A stages for trade contractor-focused insurance service provider Jones, all of which are based in the US. In January this year, JLL Spark also funded UK-based flexible office space platform operator Hubble in a £4m ($5.3m) series A round.
As heads of the fund, Shah and Lerner bring complementary strengths. Shah was co-founder and CEO of mobile and online recommendation service provider Mob.ly (formerly Goodrec) and knew David Gerster, now a vice-president at JLL Spark, as a product leader at internet company Yahoo and as a senior executive at daily deals platform Groupon. Lerner was also behind the sale of Mob.ly to Groupon after an early career building artificial intelligence for video games at Activision Studios. Both are also angel investors and have advised many startups, including Uber and Boom Supersonic.
They said for their Rising Stars profile this year: “We arrived at JLL about a year before launching the fund, with a broad mandate from CEO Christian Ulbrich to help the company benefit from new and potentially disruptive advances in proptech. This led to us acquiring a small startup, Stessa, which helps residential landlords organise all the data necessary to track the performance of their properties. As we learned more about the proptech landscape, we started to realise just how massive the opportunity is, and that led to our current model of investing in proptech startups.”
Shah and Lerner had a successful 2018, said JLL Spark, having grown JLL Spark and led the company through several strategic investment rounds. In January this year, Eric Wittman was hired as chief growth officer leading the growth team dedicated to portfolio company success with hands-on leadership, advice and direct business connections. JLL Spark hopes to see the continuing evolution of the space and continuing to invest in innovative real estate startups.
