Round Hill Ventures: Prop-Tech Fund

Bringing innovation and disruption to all aspects of our built world

Overview

Spun out from Round Hill Capital (a $8bn AUM global real estate investor with over 230 full-time professionals and 14 offices), Round Hill Ventures is a European VC focussed on capturing value created by innovation in the built environment.

Round Hill Ventures is currently raising a €200m European prop-tech venture capital fund – RHV I.

The real estate sector is undergoing a paradigm shift due to an acceleration in digitisation and technological innovation. Property Technology is driving growth through innovation across the industry. The fund will leverage its unique strategic relationship with Round Hill Capital (‘RHC’), a $6.8bn AUM global real estate investor with over 184 full-time professionals, 15 offices and an outstanding track record since 2002.

The fund will be investing in approximately 30 technology enabled businesses focused on the built environment, with a strong proof of concept and a clear USP. The fund will invest across late seed to Series-B stage companies across Europe. Through this strategy the fund seeks a target return: 3.5x MOIC, 30% net IRR.

The target size of the fund is €200m, with €80m committed for first close. Final close is scheduled for 4Q 2021.

Strategy

The Opportunity
PropTech investment in 2013 was a nascent $1.8bn but has grown aggressively at 60% CAGR over the past 5 years. PropTech increases productivity of Real Estate operations and provides a higher revenue yield.

Unlike Fintech’s evolution as a ‘disruptor’ to the banking industry, PropTech’s rapid growth can be attributed to the complementary benefits it offers to the traditional Real Estate industry.

There is an abundance of opportunities for technological disruption in the European built world, as both traditional VCs have increased allocations to the sector and strategic real estate investors are racing to invest in and adopt technologies to further their competitive advantages.

Target Investments
The Fund’s strategy is to make 30 investments according to the following criteria:

–  Verticals:  Operational efficiency, energy efficiency, smart buildings, data analytics
–  Ticket Size:  €500k – €5m
–  Stage:  Late-seed (15), Series A (10), Series B (5)
–  Capital Allocation:  50% initial, 50% follow-on
–  Target Stake: 10-30%
–  Geography:  80% EU and Israel, 20% RoW

Investment Pipeline

Round Hill Ventures will roll-in an existing portfolio of internally funded venture investments to Fund I at cost (€2.5m). This portfolio of 17 investments has a combined total enterprise value of > €400m and has generated a 1.6x MOIC in 36 months.

The Round Hill Ventures team has identified a strong pipeline, some indicative examples are:

Deposit-free renting service (€2m)
Services takes away the hassle of arranging rental deposits for a small fee and provides landlords the benefit of double the protection compared to traditional deposits.

Crowdfunded real estate project financing (€3m)
Platform facilities retail investors and individuals to build their own digital portfolio with low minimum investments, attractive interest rates and high transparency.

Tenant interaction platform (€5m)
Platform enables digital communication and interaction between building users, owners and property managers, reducing operational costs while simultaneously increasing the value of the property.

Team

  • Arnie Sriskandarajah

    Managing Director

    Early employee at a EU tech unicorn ($2b), ran FTSE 250 corporate VC (£15m annual budget), former COO of Bloomsbury AI sold to Facebook, advised the EC on entrepreneurship.

  • Yasmina Darveniza

    Investment Manager

    Co-founded game development start-up, management consultant in Australia and Europe, real estate investment and management.

Contact

 

Key Facts

Size €200m
Asset Type Private Equity
Geography Pan-European
Impact Property
Target Return 30% IRR
Fund Structure Closed-Ended
Fund Term 10 years
First Close €80m
First Close Date 4Q 2020
Final Close Date 4Q 2021
Committed Capital €80m