Camber Creek in June said it closed its $30 million second fund targeting tech companies in the real estate industry.
So far, eight investments have been made, with the firm’s typical first check ranging $1 million to $6 million.
Camber Creek aims not to simply invest in companies but to use its connections to the industry and its LP network of real estate companies to help startups grow.
VCJ recently spoke with General Partner Casey Berman. An edited transcript of the conversation follows.
Q: What’s the most significant force disrupting real estate?
A: [The] maximization of real estate. The way we define that is in two buckets. The first is literally maximizing physical assets to be used more efficiently. Most office buildings are totally vacant for more than half the time. Similarly with a multifamily asset, there is vacancy where a tenant moves out and a new tenant doesn’t move in for 30 or 60 days. So there’s this major change to take massive amounts of physical space that has no revenue, no efficiency, and maximizing that using technology.
The second bucket is through workflow efficiency. For the people who manage the real estate, the people who are leasing the real estate, the people who are building, there is so much value that can be unlocked through technology by increasing efficiency.
Q: What will separate the winners and losers in the real estate space?
A: Real estate owners and operators were not looking to use technology and are now just starting to really look to implement technology. So the sales process was incredibly long. For a startup, that is incredibly hard to overcome. What we have found now is what separates the companies that are going to win from the companies that struggle is really the ability to leverage a network.
Q: Is the real estate investment market overheated?
A: The amount of investing is getting hotter and hotter. But the exciting part of the whole business is that the consumption of tech in the real estate space is only accelerating. There is a lot of money chasing and going after real estate tech deals, and being very disciplined and focused is a key to actually investing in those companies.
Q: What kinds of deals do you target with Fund II?
A: Our sweet spot is around the Series A. What we find in the Series A is there is enough infrastructure, there is enough maturity in the company for them to really leverage and use the value we can bring to the company. That being said, we have done seed rounds. We’ve also done growth-stage rounds.
Q: Are your LPs from the real estate business?
A: All of our investors [own, operate, do construction on,] or are building different elements of [or are] financing real estate. Everything drives around real estate. So when you look at Westminster, for example, [they] provide all types of insurance for real estate owners and operators. So what we do is leverage that cross-section of the real estate industry and our LP network to help a large universe of real estate related tech companies.
Q: What seems to be driving the LP interest in participating in a fund like yours?
A: What we’re seeing now is a major trend with consumer behavior and in the workplace, where the expectation of services and products being on-demand and efficient have led real estate companies to really reevaluate the question: ‘Do we need technology?’ And now the answer across the board is ‘Yes.’