L&G backs $9m WiredScore fundraise

Legal & General Capital is one of six real estate investors to back WiredScore’s £7m ($9m) Series A funding round announced today. This sort of move from such a major real estate investor is significant. Apart from signalling the continued maturity of the tech sector, L&G is one of a number of investors that are also WiredScore clients to take part in this round. With securing funding still an issue for fledgling tech start-ups and scale-ups looking to grow, the rising trend of high-profile real estate firms investing in young companies they are already working alongside is an encouraging one. Three UK-based firms have invested in this round; L&G, U+I and Town Centre Securities. They are supported by existing investors Bessemer Venture Partners, Fifth Wall and Sterling Ventures. The digital rating scheme has raised the fund to “address growing global demand from occupiers.” Head of LGIM Real Assets Bill Hughes and WiredScore president and UK managing director William Newton spoke exclusively to EG to reveal the details of the fund raise. Hughes said the days of fund managers only investing in their buildings “was over” as the time had come to focus instead on the wider changes happening within the sector. He added: “I am really encouraged by the prospect of investment managers investing in proptech. “Where real estate and tech was three to five years ago, there were tech people with some good ideas and some real estate people who didn’t know much about tech. Now that has changed, for us at least. “Following this opportunity to invest in WiredScore, we are now actively looking for other companies to invest in. As existing clients of WiredScore, we have seen first-hand the benefit of the Wired Certification. It is through collaboration with technology companies that we can access and embrace innovative solutions. “In terms of our future investments, we would want to be users and clients as well as investors and there will certainly be more capital coming into small, young businesses with good ideas.” Newton said: “Proptech companies should be delighted to have real estate companies as investors and strategic partners. “I absolutely think this will be the future model of proptech investment. For a start-up to have the wisdom and the knowledge that an established real estate player can bring to bear will be the thing that spur them on more than anything.” Touching on the issue of “fluff and noise” in the proptech sector, Hughes pointed out that he sees “no particular merit” in investing in proptech but more in targeting the right companies with the right solutions to a problem he recognised. “What really does have merit is isolating a particular issue that needs to be addressed, like WiredScore has done around digital connectivity,” he added. As talk turned to digital transformation in a slow-moving sector, Hughes said that he thinks buying in at boardroom level will be crucial if we want to see a rapid, industry-wide change. “It is great if junior, and by that I mean less influential, people have ideas. But if they can’t control how a company prioritises capital then not much will happen very quickly. These issues have to get to the boardroom.” WiredScore’s £7m funding was secured from the aforementioned commercial real estate investors plus Momeni Digital Ventures, KingSett Capital and Savitt Partners. The raise follows a year of global expansion that saw WiredScore expand into eight new cities in the first three quarters of 2018, resulting in a 45% uptake in certified buildings within that timeframe. Matteo Colombo, investment director Legal & General Capital, said: “WiredScore is unique in its marketplace, measuring and enabling a digital society. “This investment provides clear synergies across the Legal & General business, particularly our property, venture and technology investments. We see an opportunity for WiredScore, with the support of Legal & General, to continue its rapid growth and expand into new markets.” U+I chief executive Matthew Weiner said: “Great connectivity of our built environment is already one of the most essential and valuable assets of commercial property, preparing us for the digital future ahead. “I can envisage a world not far from now in which connectivity is as prized by homebuyers and sellers as good transport links or period details. “So it’s important that the property industry keeps up. After all, if people and the UK economy are to reap the benefits that technology has to offer for decades to come, connectivity must be hardwired into our cities’ infrastructure now. That’s why we’re proud to support WiredScore in its ambition to empower landlords to deliver best-in-class connectivity experience to tenants.” There is now nearly 450m sq ft of office space already committed to Wired Certification, and WiredScore now works with more than 450 landlords and developers globally, including Blackrock, British Land and Hines. Some 1,700 buildings are committed to certification and 4m people currently work in Wired Certified buildings across North America and Europe. To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette