VC Firm Moderne Ventures Raises $230M Fund to Invest More in Proptech

A general investor dives deeper into proptech investment.

New Adventuresa venture capital and growth equity firm with verticals spanning real estate, finance, insurance and sustainability, on Monday it raised more than $230 million for its MV Core Fund III.

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The new funding comes on top of the oversubscribed $200 million MV Core Fund II, bringing the company’s total available investment funds to more than $500 million. Investors include a Chicago-based venture capital firm in the latest round GCM Grosvenoras well as returning investors the Illinois Growth and Innovation Fundand various strategic investors.

“The motivation behind Fund III is a continuation of the strategy in which we have been investing since 2008,” said Constance Freedman, founder and managing partner at Moderne Ventures. “UWith this strategy, we fully invested our Fund II, which was oversubscribed to $200 million, and we fully committed that fund by the end of 2023. Then we started investing in Fund III at the beginning of this year.”

Modern Ventures has already committed some of the new funding to two proptech companies, with a third working on a term sheet, said Freedman, who declined to name the companies.

“We invest in the proptech vertical, but we really like companies in particular that also have applicability in other markets,” Freedman said. “And we like that because I started doing this in 2008, and then 2009 and 2010 happened. You quickly realize that companies that depend on any one vertical don’t fare well in a downturn. So, while all of our deals apply to vertical, or adjacent industries, they largely apply to other markets as well.

As an example, Freedman pointed out Docusignhis company’s first investment under that strategy. Docusign works in real estate, but also beyond that industry, he said. helloan artificial intelligence company that claims to predict consumers’ tastes and preferences, is another, more recent example, he added.

From a general investor perspective, Moderne Ventures is looking at companies that address topics such as AI and digital transactions, robotics, deep tech connectivity and mobility, Freedman said.

“We think about half of our capital comes from industry strategists, and we think a lot about the business challenges they face,” he said. “So things like workforce optimization, waste management, ways to increase revenue and reduce operating costs, and customer experience are our focus.”

In addition to its three core funds, Moderne Ventures is about to announce a growth fund, according to Freedman.

“The growth fund is dedicated about half to doubling down on our existing portfolios, companies we’ve already maxed out from core-fund investments,” he said. “So, later stage, Series D and pre-IPO round. The other half will go to new companies. Core funds are usually focused on companies [with] $2 million to $20 million in revenue, and the growth fund will focus on companies above that.”

In addition to its investments, Moderne Ventures said it works to bring customers to companies through it industrial immersion programThe Modern Passportwhich aims to help companies refine and execute their go-to-market strategies. The program further connects them to Innovative Networka curated group of more than 1,500 executive and corporate partners.

Co-led with partner Lisa BensonModerne Ventures is a diverse and woman-owned company with 70 percent of the company comprised of women and minorities. Freedman launched Moderne Ventures in 2015. Its early releases include Porch (NASDAQ: PRCH), Homesnap (got by CoStar) and TaskEasy (got by WorkWave). Among other notable investments in the funds are ICON, Caribou, Measurabl and Xeal.

Philip Russo can be reached at prusso@commercialobserver.com.