Fifth Wall's Wallace: $135 million Atoms bet shows proptech shift

Fifth Wall has grown into one of the largest investment firms focused on real estate technology since its founding in 2016, with roughly $3 billion in commitments and capital under management. Its portfolio includes Procore, OpenDoor, Blend and Hippo, and notable exits include ServiceTitan's 2024 IPO and CBRE's January 2025 full ownership of Industrious at a valuation of more than $800 million. Major real estate and hospitality companies including CBRE, Hines, Hilton and Marriott are among its investors.

Wallace's view that proptech funding totals may belie actual investment reflects how AI is changing what counts as proptech. He describes Fifth Wall's growth-fund investment in Higgsfield, a visualization software company used by real estate agents and commercial leasing brokers, and its $135 million investment in Atoms, which he says would surprise him if it fell under the definition of proptech. He also points to bespoke AI development labs such as Antares, which builds intellectual property for real estate organizations on a fee-for-development model.

On construction technology, Wallace says it remains an area of focus but less so today, calling it probably the biggest graveyard in all of venture while noting it still attracts funding because it is a massive market. He encourages founders to build full-stack real estate businesses and to use generative AI to find signal in opaque real estate data. He also flags interest in decoupling land ownership from building ownership, and in AI, robotics and autonomy as catalysts that could spawn new real estate asset classes.