Why JLL is Investing in CRE Tech Start-Ups

JLL has plunged into the tech market by launching $100 million global venture fund JLL Spark. In the last nine months, the fund has invested in 11 start-up concepts, including Honest Buildings, Jones, Humble and Lively. At the CRETech Los Angeles conference this week, Andrea Jang, head of growth in the Americas at JLL Spark, spoke about JLL’s commitment to CRE tech investment to fuel the growth of technology in this industry and how start-ups should partner with a strategic VC. “We are bridging real estate and tech companies to help industries grow,” she said at the conference.

Jang highlighted four specific characteristics that tech start-ups should look for in a strategic venture fund that is a good fit for the business. The fund should “be hyper focused on growth, understand the business’s core clients and how those clients operate, understand the product, and be able to take a product and disperse it through a client’s organization.” She really emphasized that strategic venture capital funds should be a true partner with a start-up and position the start-up for expansion.

“Ultimately a start-up will decide who is a good fit, but a strategic venture capital firm can help,” she said. “But, the firm must understand what your product is trying to do and the core verticals you are trying to disrupt.” During the launch of the product, the VC fund can leverage its network to tap into distribution channels and help accelerate growth. Market penetration in the first year is essential to success, according to Jang. “If you don’t have strong adoption in year one, things will fall quickly in year two and three,” she said. “This is why it is so important for teams to understand the platform.”

To sell the product, Jang recommends that start-ups use language and metrics that appeal to real estate clients. Showing impact on NOI or occupancy are ways to illustrate and actionable impact for the company and gain a quality audience.

Lastly, the work and partnership, however, doesn’t end once the product is purchased. After the product penetrates the market, the start-up needs an internal team that can continue the client relationship. Here, the strategic venture fund can continue to leverage its network to help develop an internal client relations platform to service those customers.

Above all, JLL Spark is looking for creative and scrappy proptech firms in need of series-A funding and that are disrupting the business.