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roptech's moment in the spotlight has been tempered by a series of high-profile failures, including Katerra, Knotel, and WeWork, which vaporized at least $13 billion before filing for bankruptcy. The collapse was partly due to an influx of easy money into the space, attracting less sophisticated investors who made allocation decisions without fully understanding the complexities of real estate and construction.

    However, Fifth Wall's CEO Brendan Wallace believes proptech is not dead, but rather in its early stages of rebirth. He points to three signs: ServiceTitan's successful initial public offering, CBRE's acquisition of Industrious, and Fifth Wall's launch of a new flagship fund. These developments indicate a momentum shift towards more sustainable growth.

    Wallace argues that the companies and venture funds that survived the first boom-and-bust cycle have come out stronger, with better business models and profitability. This "flight to quality" is driven by investors' recognition of the complexities and idiosyncrasies of real estate and construction. WeWork's failure, in particular, was a result of its mismatched asset duration strategy.

    Fifth Wall's new flagship fund has attracted big-name backers, including Lowe's and Public Storage, which reflects renewed faith in proptech. The fund will be guided by lessons learned from the first cycle, focusing on more profitable and sustainable investments. As Wallace notes, "You can't just point software at construction and expect miracles."