How Camber Creek Vets Its Proptech Investments

NEW YORK, NY—Venture Capital firm Camber Creek has been focused on the real estate market since its inception in 2011, with many of the companies it has backed now a fixture in the industry.

“I owned, operated and managed a CRE company where, in the course of doing business, I noticed that a lot of the processes were old-fashioned and awkward. I then realized that there wasn’t much technology except startups,” Casey Berman, founder and managing director, tells GlobeSt.com.

Berman noted that back in 2011, approximately $60 million was initially invested in proptech.

“There was little to no technology, no monies invested in this huge segment and no one was closely looking at it,” says Berman. “Now we are really seeing the opportunity unfolding and we are in the right place at the right time. We get over 1,000 real estate technology proposals in the course of a year.”

When closely examining proposals, Berman and his team filter out the best investment opportunities through several processes especially referrals from their best channels and what they refer to as “warm leads.” They also take a look at “cold leads” where they place each company into very specific categories.

“For example, we saw about 5 companies present us with proposals for access control for apartments. We very quickly focused on Latch because they presented themselves as effectively and profitably solving the problem,” explains Berman. “We then reached out to our network, introduced the product to our partners and had them try it to determine if they like it.”

Berman and his team presented Latch to an investor who owns over 150,000 apartments and urged it to look at the product. The investor liked it, Camber Creek invested and today, 10% of every new multifamily unit has a Latch product, Berman says.

“When one of our partners buys into the product plus loves the team and vision, it reaffirms what we initially thought about the product. Every deal is approached very strategically. If you look at our portfolio, we pretty much employ the exact same strategy for each deal,” observes Berman.

When selecting companies in which to invest, the team initially meets with the company when it is almost too early to place money. Then they watch and understand the start up’s processes as well as its competitors. This process and funding cycle takes between 12 months to up to 4 years.

“However, we can also invest very fast but we usually don’t need to. Our fastest deal was done in 30 days,” says Berman. “The key for us is making sure that the companies we invest in continue to be successful.”

Berman is encouraged that CRE senior leadership, who were cautious about emerging technology as recently as two years ago, is now solidly on board.

“The sentiment has changed, CRE needs tech. There’s still a lot of noise in the industry. The best companies are doing better than before,” says Berman. “We are excited to see tech adapted across the field.”