Brendan Wallace, co-founder and CEO of Fifth Wall, argues that the conventional definition of proptech is too narrow for where money is actually going. In an interview with Crunchbase News, he said AI is pushing investment toward horizontal software that serves many industries and toward businesses that use technology to own and operate real estate directly. As a result, public proptech funding totals may understate the real flow of capital.
He pointed to two recent Fifth Wall investments as examples. Higgsfield, a visualization software company, is used by real estate agents and leasing brokers to render unbuilt homes from blueprints, even though it is not typically classified as proptech. Fifth Wall also invested $135 million into Atoms, which Wallace described as a full-stack real estate business. Neither would necessarily show up in narrow proptech funding data.
Wallace said AI has raised the bar for startups seeking venture funding. Simple application point solutions are becoming less financeable because large labs or real estate companies can replicate them quickly. Instead, Fifth Wall is backing Antares, a bespoke AI development lab that builds custom solutions for real estate firms on a fee-for-development basis. He also suggested real estate spending on foundation models may soon surpass spending on proptech applications, marking an inflection point for the sector.