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rendan Wallace, co‑founder and CEO of Fifth Wall, says the real‑estate tech sector endured the toughest three‑year stretch in its history. “We saw a lot of companies and new businesses and venture funds die. We just lived through an extinction event,” he explained. Fifth Wall, the world’s largest venture fund focused on built‑environment technology, now manages more than $3 billion.
The downturn was driven by higher interest rates, a pullback in capital markets and a near‑universal shift of venture capital toward artificial intelligence. Although AI is present in property tech, it hasn’t yet revitalised a sector that has traditionally been slow to modernise. Wallace notes that the “winter” is over, citing last year’s ServiceTitan IPO. The cloud‑based field‑service platform raised roughly $625 million and its shares surged 42 % on debut. New unicorns such as Juniper Square and Bilt also signal a rebound. Bilt, a housing‑reward platform, secured $250 million at a $10.75 billion valuation in a round led by General Catalyst and GID, with a strategic stake from United Wholesale Mortgage.
Wallace highlights that the destruction of enterprise value from 2022 to 2024 was unprecedented, but the creation of value in the past 15 months has been equally remarkable. Yet climate‑related property tech faces a different challenge. Political winds in the United States have swung sharply away from sustainability and climate resilience, undermining the climate‑tech ecosystem in real estate. The sector had previously benefited from President Biden’s billions‑dollar public funding for decarbonisation, but that momentum has stalled. “Many climate funds are struggling to raise. Many real‑estate owners are deprioritising sustainability, decarbonisation and ESG, and there is a palpable negative sentiment shift that has set on climate‑related prop tech,” Wallace said.
Despite this headwind, he remains optimistic. Local governments, especially in progressive cities, continue to pursue carbon‑tax and green‑infrastructure initiatives. New York City, for example, is a leader in environmental policy and is actively seeking capital‑raising mechanisms like carbon taxes. Fifth Wall is taking a long‑term stance, investing while the negative “halo” around climate persists because valuations are attractive. “The real‑estate industry is still responsible for 40 % of carbon emissions. It’s still the industry that has shirked its responsibility for years, and it’s going to cost a lot to decarbonise. It’s a lot of money, and capital is going to flow into that space … which is one of the reasons why we’re still deploying capital, because we’re the only ones,” Wallace added.
