When mortgage rates soared in 2022, the real estate market and many real estate-focused startups took a big hit, prompting industry veteran Clelia Warburg Peters to leave her role as venture partner at Bain Capital Ventures to start her own real estate tech startup.
Unlike many other specialist real estate tech funds, Peters invests in technologies that aim to transform the industry, rather than simply servicing existing players.
“Anything that's a purely incremental improvement is a really hard sell to the real estate industry,” Peters told TechCrunch. “The real estate industry is a bad customer for technology. I think that's pretty clear at this point.”
That message resonated with investors, who pumped $88 million into Peters' company, Ella Ventures, in its first fund. But her experience was also crucial.
Peters’ career in real estate began over 10 years ago when he was asked to run his family’s business, one of the largest independent real estate brokerages in the New York City area.
She planned to work in real estate for just six months before returning to her greatest passion: technology. “I fell in love with real estate but was also surprised by the lack of innovation in the industry,” Peters said.
That realization led her to co-found MetaProp, one of the first boutique companies focused solely on real estate, in 2014. In fact, Peters said she was the one who coined the term “proptech” to describe this emerging technology sector.
“Metaprop only had strategic LPs looking for strategic insight as much as a financial return on their investment,” Peters said.
Peters said most other real estate tech funds are backed by strategic investors, but she wanted to do something different with Ella, whose limited partners include New York-Presbyterian Hospital, Continental General Insurance Co., Fenwick & West and her former employer, Bain Capital Ventures.
“I wanted the freedom to invest. [companies] “This could put us at odds with investors who are strategic LPs to many of my peer funds, and we wanted to be clear that we are investing with the expectation of top quartile or top decile financial returns,” Peters said. [other] Funds in this space are not necessarily aiming for this.”
Peters credits her time at Bain and the mentorship she received from veteran fintech investor Matt Harris with teaching her how to be what she calls a “quintessential venture investor.”
Ella Ventures has already backed 10 startups, including HoneyHomes, a subscription service for handymen; ViaBot, a robotics company that Peters called a Roomba for parking lots; and Truehold, a startup that buys homes from seniors and leases them back.
The firm invests in startups from seed to Series B, with the average investment ranging from $3 million to $5 million.
The company is run by Peters and her partner, Raja Ghawi, an experienced construction investor.