DealmakingProptech

Proptech VC Fifth Wall halts latest SPAC

Proptech-centered venture capital firm Fifth Wall has withdrawn its $150 million plan to take another real estate tech firm public via a special purpose acquisition company, or SPAC, according to a filing with the SEC on Friday.

Fifth Wall Acquisition II, the second blank check company formed by Fifth Wall targeting real estate tech, originally filed in March 2021 to raise the $150 million in an initial public offering (IPO).

At the proposed deal size, Fifth Wall Acquisition II would command a market value of $194 million.

According to Fifth Wall, the company was set to be led by CEO and Chairman Brendan Wallace, who has served as cofounder and managing partner of Fifth Wall Ventures since 2016, and CFO and Director Andriy Mykhaylovskyy, who has been a managing partner at Fifth Wall Ventures since 2017.

The group’s previous SPAC, Fifth Wall Acquisition I, (FWAA), raised $300 million in February 2021. By April, Fifth Wall revealed FWAA was merging with SmartRent, a Smart Home automation platform for the residential industry, in a deal that valued the combined entity at $2.2 billion and included an oversubscribed $155 million PIPE alongside the $345 million in cash held in FWAA’s initial public offering.

At the time of its first blank check company, Fifth Wall had invested in 11 companies that went on to become unicorns, including Opendoor, Hippo, Blend, Doma (fka States Title), Loft, VTS, Loggi, and Classpass.

In May, Fifth Wall also launched a third SPAC that raised $275 million upon going public that currently trades on the Nasdaq under the ticker FWAC. However, there is no word yet on when it is set to merge with another company.

Despite Fifth Wall taking SmartRent public in August in a deal that raised $450 million for the startup, SmartRent’s stock has downturned more that half of its peak value it reached in September – painting a growing picture of startups struggling to settle in after SPAC mergers. Shares of half of the companies that finished SPAC deals in the last two years are down 40% or more from the $10 price where SPACs typically begin trading, erasing tens of billions of dollars in startup market value, the Wall Street Journal reported.

However, that hasn’t stopped SPAC sponsors from issuing more blank-check companies, nor has it slowed Fifth Wall down from raising capital across its various funds. The proptech VC revealed in 2021 that its total funding raised reached $1.1 billion.

Most recently, the VC firm closed an oversubscribed €140 million for its European Real Estate Technology Fund (European Fund) that brought Fifth Wall’s capital under management to approximately $3 billion. The fund has already completed investments into fast-growing startups, including Clikalia, a Spanish Ibuyer platform, and Gorillas, an on-demand grocery delivery company.

Another new SEC filing has also unveiled that Fifth Wall is raising funds for a late-stage climate tech fund, though it has not disclosed how much it intends to raise for the new fund.

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