Camber Creek Closes $100M-Plus Fund in 2023’s Largest Proptech Raise So Far
VC firm will aim it at follow-on and special opportunity investments following $325 million Fund IV close last year
By Philip Russo February 15, 2023 9:00 amreprints
In the biggest proptech capital raise to date in 2023, Camber Creek, a leading real estate tech venture capital firm, announced Wednesday that it has closed its Opportunity Fund I at greater than $100 million. The latest fund follows the firm’s $325 million Fund IV close in 2022 and is to be used for additional investment in companies Camber Creek already funds as well as special opportunity investments.
The Opportunity Fund’s limited partners include new and existing institutional and strategic investors. It also gives Camber Creek an opportunity to retain its pro rata on earlier investments as well as to invest in opportunities unique to the current market environment, according to the company.
“It is for follow-on where we have exhausted reserves in companies that are from previous core fund vintages, as well as special opportunities that might surface,” Jeffrey Berman, partner at Camber Creek, said of the latest fund.
Founded in 2011, the Washington, D.C.-based Camber Creek claims to have a limited partner network of more than 300 global real estate groups. The VC firm does not identify its limited partners and declined to do so in reference to the Opportunity Fund, said Berman.
Despite a decline in proptech funding in 2022 and the macroeconomic headwinds of continuing high interest, mortgage and inflation rates, Camber Creek’s latest fund was oversubscribed, Berman said.
“The genesis actually goes back to our very earliest funds, where we like to say we played a part in accelerating the growth of our portfolio companies,” he said. “In every fund life, you have your initial investment and then you reserve for follow-on. But what happens when companies continue to excel and you run out of reserves? That was the conundrum that we were facing.”
That led to Camber Creek deciding to have a pool of capital that could be invested across funds, he said.
“Typically, when you have multiple fund vintages, most fund managers would shy away from investing [out of] a later fund into a portfolio company from an earlier fund, because the makeup of the investors is slightly different,” said Berman. “You don’t want to have any kind of conflict of interest. Of course, if the companies are continuing to excel you want to be able to further your investment and to continue supporting that company. Having an opportunity or continuation vehicle like this, that has a prescribed modus for investing in these types of opportunities and situations, paves the way for us to be able to continue supporting our companies that are continuing to grow well when we’re out of the reserve period.”
Proptech companies in which Camber Creek has invested include Arcadia, Bilt Rewards, Curbio, Flex, HappyCo, Measurbl, Notarize and VTS. In addition, Camber Creek has had several successful exits, including selling TaskEasy to WorkWave and Building Engines to JLL.
Berman declined to forecast the total amount of money that will be invested in proptech in 2023. Instead, he chooses to focus on what cap tables might look like for companies that do get funding this year.
“If you look especially at 2021, which I think everyone can agree was an outlier year, the cap tables weren’t all VCs. It wasn’t all general VCs,” Berman said. “You had corporates, family offices, angel investors, and, of course, the 800-pound gorilla, the alternative investment managers like Tiger [Global Management] that were heavily leaning into the space. I think you’ll see less of that. I think you’ll see more of the groups that have made this their day jobs, for lack of a better term. You’re going to see the subject matter experts continuing to lean in.
“I would certainly say that this is as exciting a time as any,” Berman added. “We keep on getting more excited about the space. I think the amount of money that goes in, and who is writing those checks, might shift somewhat. It will be really interesting to see at the end of 2023 how that shakes out.”
Philip Russo can be reached at firstname.lastname@example.org.