Insights on technology and real estate.

Fifth Wall is thrilled to announce a strategic investment in LimeBike, the largest and fastest growing dock-free bikeshare operator in the U.S. Fifth Wall’s investment comes alongside $70 million of new capital raised from Andreessen Horowitz, Coatue Management and many other exceptional investors. LimeBike has emerged as the clear market leader in dock-free, shared smart mobility thanks to its innovative business model, capitalization, operational execution, and cross-border supply chain experience. Bike sharing has become an integral aspect of urban transportation infrastructure by alleviating congestion and bridging “last mile” / “short haul” transit challenges automobiles truly cannot solve (to learn more about the idea of “last mile” transportation, listen to an interview with LimeBike’s Co-Founder and CEO, Toby Sun, on our podcast).

Why does LimeBike make sense for Fifth Wall given our Built World investment thesis? First, Fifth Wall’s strategic real estate investors include many of the largest real estate owners in the U.S. Those owners all have a vested interest in making American cities more accessible, with less congestion and pollution. Second, mass consumer adoption of bike sharing leads to far more livable cities and increases urban property values. Third, real estate owners want to decrease parking requirements of their assets as most remain over-parked as parking utilization is declining due to falling rates of car ownership amongst Millennials and increased use of ridesharing. Fourth, real estate operators have a unique opportunity to better facilitate “first and last mile” commuter challenges. Controlling the consumer endpoints: where people live, work, and shop, is critical to driving broad bike sharing adoption. Watching the trend and rapid growth of the space led Fifth Wall to believe bike sharing represents an enormous opportunity for our strategic investors to massively influence the outcome in the space.

Despite the market’s relative infancy, bike sharing is growing at an astounding 25 percent per year. In China, over 50 million bike share rides per day are logged compared to the 28 million total bike share rides in the U.S. in 2016; meaning there are almost two times as many bike share rides in China per day as there are in the U.S. per year. City transportation systems with effective bike share programs are seeing corresponding decreases in traffic congestion (particularly in dense, heavily developed, urban areas) and have found bike sharing a cost-effective way to streamline last mile commutes. The growing market is expected to continue acting as a boon for cities and municipalities, corporations, and real estate operators.

There are even more profound social, governmental, environmental and public health benefits of bike sharing. Bike sharing reduces the strain on America’s increasingly challenged roadway infrastructure at a time when there is largely bipartisan support for a national infrastructure investment program. Using four thousand pounds of metal (the weight of a typical car) to transport a single person short distances is environmentally irresponsible. Cars release approximately 333 million tons of carbon dioxide into the atmosphere annually, which is 20 percent of the world’s total according to the Environmental Defense Fund. Motor vehicle crashes are consistently among the top ten leading causes of death in America, killing 37,461 Americans in 2016 alone. Reducing the number of cars on the road is a positive societal trend and Fifth Wall believes an emergent bike sharing winner can accelerate that reduction.

Why LimeBike?
Launched in January 2017, LimeBike quickly rose to the top ranks of the bike sharing market, taking its place as the largest and fastest growing dockless bike share operator in the U.S. In less than six months of operations, Limebike effectively lapped its competition with 35,000 bikes deployed available in 45 key markets around the country, with a focus on large U.S. cities and college campuses.

Dockless technology sets LimeBike apart from alternatives and gives riders a higher level of flexibility and convenience to pick up and drop off bikes anywhere. First generation bike sharing solutions that emerged in many cities over the last decade were docked bike sharing, like Capital Bikeshare in Washington DC and Citibike in New York. However, the limitations of first generation solutions became immediately apparent to both consumers and real estate owners. Hence, adoption of U.S. bike sharing has lagged significantly behind Europe and Asia. First, it was incredibly costly and inefficient to install large complex docking stations and equally hard to secure the appropriate permitting and easements to provide a sufficient density of bikes to be useful to most city dwellers. Consequently, docked bike stations were too sparsely and inconveniently located for most potential riders; often times long walking distances from their offices, homes, or retail districts. Inconvenience in turn spawned another problem for first generation docked bike sharing: because the utilization of the bikes were low, companies like Citibike and Capital Bikeshare had to maintain high per ride prices to justify the significant cost of installing the docks and maintaining their bikes. These high prices in turn further decreased utilization. Ultimately, these first generation docked bikeshare solutions had all the characteristic of a local taxi monopoly before Uber and Lyft: inconvenience, high cost, and restricted supply. Like local taxi monopolies before Uber, docked bike sharing solutions have sought to sustain themselves by establishing exclusive rights to operate in certain cities like New York.

In effect, docked bike sharing programs were the wrong “test” to run to truly validate if short haul transportation in the U.S. could be reimagined through bikes. However, technology innovations now permit truly dockless bike sharing programs, meaning bikes can truly be accessed anywhere and can achieve citywide ubiquity and coverage. Not having to install and/or maintain docks means a bike can be ridden up to the door of your destination or picked up right outside your office. Ubiquity in turn increases utilization as LimeBike has demonstrated. Additionally, unencumbered by the high costs of dock installation and maintenance, LimeBike can offer a lower cost to potential riders. Moreover, because LimeBike is free from installed docking stations, they can increase or decrease the supply of bikes in any market to meet demand and/or reallocate bikes nationwide due to seasonality. Lastly, Limebike doesn’t require capital from the cities or college campuses where it launches and can expand incredibly rapidly and develop a national network effect as evidenced by the fact that in just the last 6 months LimeBike has successfully launched in over 37 markets across the U.S. LimeBike’s ambitious expansion strategy strategy, being on pace to open one new market a week) is clearly resonating with bike riders — LimeBike reached the top spot in app downloads in just six months, eclipsing the closest dockless player by more than double the downloads.

The LimeBike team also has an expanded target market in mind; the company is releasing e-scooters and e-bikes with expanded ranges from one mile to three-plus miles (pilot programs currently running). It recently launched the country’s biggest e-bike deployment in Seattle. The additional range stands to greatly increase bike sharing adoption in cities with significant elevation gains (such as San Francisco and Seattle) and to increase the range from major public transportation hubs.

LimeBike’s team has a strong and deep background in manufacturing with operating experience in Asia, where the majority of bikes and scooters are made as well as being the largest addressable market for future growth. Co-Founders Toby Sun (CEO) and Brad Bao (Executive Chairman) were part of Fosun Capital, and have collective experience spanning PepsiCo, Deloitte Consulting, and Tencent America. Their CTO and co-founder, Charlie Gao, was a crucial engineer at Square and Facebook. This dynamic team is qualified and well-positioned to lead LimeBike’s growth trajectory. The team is also diverse in background, comprised of former legislative staff members, campaign strategists, serial entrepreneurs, and top talents from various tech firms.

The “Big Picture” of Bikeshare and Real Estate Integrations
Bike sharing is reshaping cities across the U.S. and high-traffic urban real estate consumer endpoints have the real advantage — Fifth Wall LPs control the last ten feet of the last mile across all types of real estate locations including: commercial (Hines, CBRE, Rudin), retail (Macerich), multifamily residences (EQR, Hines, LMC), hotels (Host), and single family residences (Lennar). These locations mark the start and end of the majority of consumer transit routes.

The opportunity is clear: Real estate owners (not cities) control the bikes and docking stations at their properties. Fifth Wall LPs benefit from making bike sharing an integrated amenity for tenants, at no cost to the landlords,that is accessible and convenient within existing and new real estate assets. To date, Fifth Wall LPs have executed no major partnerships in this space, and have identified LimeBike as the clear market leader capable of integrating with the largest real estate operators in the U.S. Fifth Wall will work closely with LimeBike to establish “hubs” for LimeBikes where consumers can ready access available LimeBikes, buildings can ensure organized access to bikes for their tenants, and partnerships with local retail establishments could be established to encourage customers to visit on a bike share.

With the real estate partnerships Fifth Wall can bring to bear to support LimeBike’s growth, we believe we may be on the precipice of a watershed paradigm shift in short-haul transportation in the U.S. with LimeBike positioned as the market pioneer in this shift. If bike sharing even marginally begins to replace automobile usage, urban life in America will be forever improved for residents, for governments, and for major stakeholders like real estate owners. LimeBike has a meaningful competitive moat, strengthened by placement with Fifth Wall’s real estate operator network and is primed for an impactful outcome as the category leader in the rapidly growing bike sharing market.

Brendan interviews Toby Sun, CEO and Co-Founder of LimeBike. They discuss the idea of "last mile transportation," the dichotomy between docked versus dockless, and China's bike share market. About LimeBike: LimeBike reinvents transportation in cities and colleges by working with communities to provide people with convenient, affordable, and healthy transportation options that are eco-friendly. For more information, please visit: www.limebike.com

Fifth Wall is excited to announce our investment in Harbor, the first blockchain technology company addressing the regulatory challenges of trading private securities on blockchains, including Initial Coin Offerings (ICOs) and secondary trades. Harbor’s decentralized compliance protocol built with blockchain technology will standardize the issue and trade of crypto-securities. In layman’s terms: Harbor helps protect coin issuers and investors by making it easier to abide by securities, tax, and other regulatory requirements, introducing needed “law & order” to the current “wild west” atmosphere of the ICO boom.

Considering Fifth Wall’s focus on Built World technology, one might wonder what our interest is in crypto-securities compliance innovation. We care because the lack of crypto-securities compliance is hindering the tokenization of real estate securities. Among categories of private securities, real estate dwarfs any other. The value of U.S. real estate alone is $40 trillion, significantly larger than all U.S. stock markets ($35 trillion). Real estate is the U.S.’s largest capital market, the largest lending category, the largest store of consumer wealth, and comprises over 13% of U.S. GDP. Despite their vast size, real estate capital markets are among the least liquid and transparent in existence, not to mention among the most heavily regulated asset classes.

Enter blockchain technology.

Blockchain’s key breakthrough is allowing market participants to transfer digital assets without the need for a centralized third party, thereby improving the efficiency and transparency of capital flows, while lowering transaction costs. However, increased liquidity brings significant challenges to issuers and investors. Private securities, such as real estate securities, must adhere to the regulations of governing jurisdictions for both initial issuance and secondary trades. Almost all coins in circulation were issued as non-securities, but the securities status of many are in question, leaving issuers in a precarious position and contributing to the current ICO market’s unpredictability. Without appropriate regulatory protocols, no meaningful ICOs of real estate assets will occur, and trillions of dollars of real estate value will remain untouched by ICOs and blockchain technology.
Enter Harbor.

The Harbor protocol remedies this problem by delivering critical compliance infrastructure for crypto-securities, allowing issuers and investors to play by existing rules to enforce compliance across all transactions and jurisdictions. To date, the absence of such a regulatory framework has been the major hindrance in the tokenization of real estate assets using blockchain technology. Existing blockchain solutions have already enabled real estate tokenization — meaning it’s technically possible to fractionalize ownership using blockchain technology and a crypto-currency — but the absence of appropriate regulatory compliance has deterred institutional-quality real estate investors from participating, particularly at scale.

Harbor will allow real estate assets to securely ICO and trade using a decentralized blockchain ledger, releasing latent demand to tokenize real estate transactions that were impossible before the protocol’s invention. Harbor represents the key to unlocking an unprecedented amount of value by providing the rails to democratize access to the most valuable asset in existence: real estate. To put this into perspective, as of 2016, the value of professionally managed global real estate alone was $7.4 trillion and all developed real estate globally amounts to about $217 trillion.

Harbor’s team is beyond exceptional and uniquely poised to tackle this enormous opportunity. Fifth Wall believes Harbor’s protocol is precisely the standard the industry needs to trigger a tsunami of real estate assets that will tokenize, ICO, and trade on the blockchain. This represents the most profound, disruptive change to real estate capital markets ever and the potential to spur the mass adoption of institutional blockchain solutions within the broader real estate industry. Fifth Wall is thrilled to be part of the journey.

Energy and maintenance costs comprise nearly 50% of total operating costs in commercial and multifamily buildings, while accounting for almost 20 percent of the nation’s annual greenhouse gas emissions. Given the dollar amounts these percentages represent, it is clear an effective energy and operations management strategy is critical for minimizing costs and running a successful real estate enterprise.
Fifth Wall is thrilled to officially announce its strategic investment and partnership in Enertiv. Enertiv’s innovative solution utilizes advanced proprietary meters and IoT (Internet of Things) sensors to offer real estate enterprises targeted insights, automation, and transparency. Enertiv’s platform continuously tracks equipment-level (elevators, chillers, boilers, pumps, cooling towers, elevators) performance, the indoor environment, and utility consumption to deliver full transparency into building operations for landlords and operators. With its proprietary EnertivTwo Meter, Enertiv is a clear leader in bringing equipment-level data and “smart building” capabilities to the more than 90% of multifamily, office, and industrial assets lacking any data beyond a utility bill to drive daily operations. Fifth Wall is excited to bring Enertiv to our growing portfolio of ground-breaking real estate investments.

Enertiv’s unique value lies in its ability to deliver insights and bring transparency to energy usage, maintenance, and tenant comfort. The platform quickly delivers actionable analyses through visualizations and direct notifications while helping identify root cause of performance issues. With these insights, Enertiv facilitates 10%-15% in decreased energy and maintenance-related costs to best-in-class real estate portfolios. Given the level of energy consumption seen in real estate today, these potential savings can easily equate to millions of unlocked dollars in property values (by increasing Net Operating Income) across various asset portfolios. Due to low implementation costs, Enertiv’s solutions generally have a payback period of under 2 years (and up to as fast as 6 months).

Even more, Enertiv’s solution is not confined by or limited to data from its proprietary meter, the EnertivTwo. IoT sensors placed throughout the building connect wirelessly and supplement the EnertivTwo’s equipment performance data. Enertiv’s open platform even allows for integration with third-party meters and sensors enabling measurement of important environmental factors — such as air quality and water quality — much more cost effectively than closed systems.

This continuous tracking of every critical piece of equipment in a building provides operators real-time and predictive fault detection. Additionally, the ongoing equipment-level tracking capabilities affordably enables the “smart” system to pinpoint specific areas of inefficiencies in utility consumption on an ongoing basis — this is impossible to do with the vast majority of energy management solutions today that are only able to capture building-level data alone.
After surveying the landscape, we feel that Enertiv is the company that is best positioned to immediately provide comprehensive energy and maintenance systems to office, multifamily, and industrial assets that have historically provided very low levels of data and insights to their managers. The platform they have built is aimed at addressing every aspect of building operations: equipment reliability; maintenance productivity; electricity, water, and gas efficiency; tenant submetering; and occupant health and comfort. The intuitive nature of Enertiv’s solutions come as a welcome reprieve for an industry used to legacy systems.

Access and distribution with Fifth Walls’ strategic distribution footprint is a huge boost for Enertiv’s customer base. This deal came highly referred to Fifth Wall. The Rudin family, a LP of Fifth Wall, previously invested in Enertiv and has already initiated paid pilots. Beyond a strong recommendation by the Rudin family, Enertiv is already in preliminary discussions with other Fifth Wall LP’s to identify significant cost savings within their respective portfolios as well. Each additional networked smart building adds real-time data and further bolsters the predictive capabilities of Enertiv’s platform, providing greater value to Fifth Wall’s engaged partners as the company scales.

The Future of Smart Buildings
The investment marks one of Fifth Wall’s initial plays into our “Smart Building” thesis and timing is perfect for Enertiv to become a category leader in this area. As smart cities and buildings become more than buzzwords, Enertiv adds smart building capabilities for the long tail — comprising the vast majority of real estate assets without data capabilities. Enertiv’s installation process costs a fraction of the more than one million dollars that it can cost to implement even the most traditional of building management systems. In fact, measured on a per-equipment basis, the EnertivTwo meter is the most affordable on the market.

Even beyond cost-savings aspects for building owners and real estate enterprises, customers also drive the demand for smart buildings able to enhance their lives. Tenants want more from their spaces, and building owners increasingly recognize a utility bill at the building level is not enough. As studies continue to link indoor environmental conditions and productivity, more commercial tenants will consider office conditions as a major competitive factor. Enertiv tracks indoor environmental conditions to trigger a notification if, say, indoor CO2 levels are threatening productivity.

Ongoing cost savings are only one aspect of Enertiv’s appeal. The data provided by Enertiv’s platform enables real estate companies to make better informed decisions about retrofit projects. By measuring historic costs exactly, companies can verify retrofit proposals for accuracy and precisely know what the payback period. For equipment that will remain in a building for up to 25 years, making the right decisions upfront pay dividends in the future.

Reducing operating expenses is the primary strategy to maintain profitability and long-term asset value. Enertiv addresses the two largest contributors to operating expenses: maintenance and repairs, and utility consumption.

Maintenance and repairs: By continuously tracking every critical piece of equipment in a building, Enertiv provides building operators with real-time and predictive fault detection. Instead of wasting time on investigations to uncover the root cause of issues, maintenance teams are directed to the exact piece of equipment causing the problem. This can bring the time from failure to repair down from a few weeks to a few hours. Beyond saving on labor costs, it also extends the useful life of equipment and improves tenant comfort.

*Utility Consumption: *Enertiv’s unique ability to capture equipment-level data in real time uncovers inefficiencies in utility consumption that is not possible with building-level energy management solutions. For example, large buildings are often charged by the electricity utility for the highest 15-minutes of energy consumption during a billing period. Where previously operators were at the mercy of the peak demand billing strategy, they now can identify the exact sources of high energy consumption, smooth out the peak, and reduce the rate for the entire billing period.

Fifth Wall accelerates the growth of companies positioned to disrupt the real estate technology worlds in which they operate. Enertiv is such a company; we are excited to equip owners, operators, engineers, and property managers with Enertiv’s platform to reduce operating expenses, make informed decisions, and maximize occupant health and comfort. Our real estate footprint is an unparalleled distribution advantage for Enertiv to catapult it into a smart building and energy IoT market leader. Whereas other IoT solutions provide point solutions to specific problems, Enertiv addresses building performance holistically with in an innovative platform designed to scale.

Buying a home is the most important financial decision an American consumer makes in his or her lifetime. Home equity is the largest source of consumer wealth, and home mortgages the largest consumer obligation. And yet, despite the profound impact of home ownership on the U.S. economy and individual families, it remains slow, arduous, and hopelessly antiquated. Increased liquidity, consumer transparency, and greater mobility has remained elusive, and one need look no further than the 2008 housing crisis and ensuing recession to see how far-reaching the economic and social implications of this are.

To that end, we’re thrilled to share the news that Fifth Wall has expanded its investment to $135 million in equity and debt with its anchor LP Lennar in Opendoor, the largest strategic technology investment ever made by a real estate company. Following on Fifth Wall’s $35 million equity investment in Opendoor’s Series D in 2016, we have now also invested $100 million in debt financing. (Third party funds managed by LP Rialto Capital Management funded a significant portion of the investment.) With this deal, the nation’s largest home builder is joining together with the most disruptive company in residential real estate to solve a pervasive problem plaguing the industry, consumers, and the broader U.S. economy today: the painfully inefficient process of buying and selling a home.

Making homes more liquid is the single most transformative event that could happen today in the U.S. economy, well outsizing the potential impact of blockchain, autonomous driving and, yes, even tax reform. With Lennar and Fifth Wall investing and partnering with Opendoor, first time homeownership is being completely re-imagined. Seeing the opportunity for Lennar to be a “kingmaker” for Opendoor and dramatically accelerate the company’s pace of growth, Fifth Wall brought these two firms together through this significant investment and helped orchestrate this partnership to address this market at scale.

A Perfect Match of Supply and Demand
The alignment of Lennar and Opendoor addresses one of the hardest parts about buying a new home — selling your existing home.
Lennar is not only the nation’s largest home builder, but also the most technology-forward. Given their goal of providing high-quality, affordable homes to consumers in the most efficient way possible, Lennar has amalgamated a robust ecosystem of financial products that make it easier to transact a home, from mortgages, to title insurance, to home insurance, etc. Digitizing these residential financial products has been a strategic priority for Lennar and Fifth Wall, as digitization holds the potential to increase both transparency and affordability of U.S. housing.

Opendoor is further increasing that transparency through a pioneering technology platform where consumers can get a quote with a fair market off on their home in a few clicks and gain access to liquidity the moment a homeowner is ready, increasing the potential frequency of homes sales by making it easier and less costly to transact. Opendoor is injecting liquidity into a marketplace where none has existed, and streamlining the transaction which traditionally involves a months-long closing process.

The partnership is a paradigm of the kind of win-win-win scenarios we seek at Fifth Wall: a win for Lennar, a win for Opendoor, and a win for homeowners! Furthermore, this deal validates the Opendoor model, and integrating the companies gives customers a complete, end-to-end home buying and selling experience. Opendoor learns daily from Lennar’s best-in-class operational experience, and further benefits from Lennar’s unmatched distribution through its Trade-Up Program — providing a new channel to access customers, which will broaden Opendoor’s scope and scale.

The Opendoor investment is not only smart market economics for Lennar, but allows them to more deeply understand their consumers — using Opendoor data to drive insights on emerging cities and communities of interest, as well as home style, size preferences, etc. The partnership also allows existing Lennar homeowners to leverage the Opendoor platform as they look to move into a new home.
This is incumbent-disruptor symbiosis at its finest and is characteristic of all of the deals Fifth Wall has executed across its portfolio. Industry disruption doesn’t have to end with a company’s demise. When incumbents embrace startups, businesses are not only enhanced, but they thrive. And the validation on both sides is clear: Lennar is establishing themselves as the leading tech-enabled home builder and Opendoor is going to market with buy-in and support from the largest incumbent in its category. And consumers across the country benefit: when homes become more frictionless to transact, imagine the wealth creation for tens of millions of Americans, especially lower and middle income families, who can finally make a homeownership decision they never otherwise could without this safety valve.

This record-breaking investment is the epitome of a Fifth Wall deal, and we’re looking forward to forging many, many more. Congratulations to the Lennar and Opendoor teams on this landmark deal!

The home insurance industry has long been due for a shake-up, and with the confluence of digital technology and increasingly connected and modernized homes, Hippo is reimagining the way homeowners find, secure, and interact with their home insurance company. Fifth Wall is pleased to announce a strategic investment in Hippo alongside Comcast Ventures, a tech-enabled digital home insurance provider delivering up to 25% savings on premiums through both new technology, and the removal of commissioned agents. Hippo is revolutionizing home insurance for the 21st century.

Post-launch, Hippo saw double-digit month-over-month growth in its customer base across the two largest insurance markets in the United States, California and Texas, along with a successful launch in Arizona. Having found such significant success in these important states, Hippo plans aggressive expansion in 2018, including into markets such as Illinois , Pennsylvania, and Ohio. Among Hippo’s most compelling innovations is its digitally-enabled model of delivering home insurance quotes to homeowners in less than 60 seconds (compared to industry average of 15 minutes), as well as its ability to bind customer policies within three minutes. This company’s streamlined approach and superior customer service results in high Net Promoter Scores and has led to increased customer loyalty and word-of-mouth marketing.

Hippo is a modern brand for the smart consumer,offering premiums up to 25% less than the competition. As part of its investment in smart home technology, Hippo provides a water leak sensor with every policy, giving homeowners the ability to detect leaks early and avoid expensive claims that would impact not only the homeowner, but the company’s bottom line. It’s small but meaningful tech innovations like these that have made Hippo unique in the marketplace, as well as its claims advocate concierge team that provides amazing customer care throughout all claims and support. Furthermore, partners with nearly 200 years of experience and $200 billion in assets underwrite all of Hippo’s policies. Strategically, this means Hippo doesn’t incur the risk from underwriting, however, shares in the upside when underwriting creates a profit. For homeowners, knowing their insurance company will not go under in the event of a natural disaster, such as flood or wildfire, offers significant peace of mind. Additionally, Hippo’s policy management system is built in-house, which is a major technological differentiator and strategic advantage.

Hippo relies on three primary sales channels: partnerships, insurance agents, and direct to consumer. Fifth Wall’s strategic network of some of the largest real estate developers in the country — including Lennar (44 thousand homes per year), Trammel Crow (5 thousand apartments per year), LNC (6 thousand apartments per year), and Hines (2 thousand apartments per year) — is an unrivaled go-to-market vehicle to accelerate customer growth. While partnerships and insurance agents are being used heavily in the early stages to grow Hippo’s customer base, Fifth Wall is deeply bullish on Hippo’s unique direct-to-consumer online sales strategy as a long term customer acquisition channel.

Led by CEO Assaf Wand and CTO Eyal Navon, Hippo’s full team has unparalleled experience across key industries. Its collective expertise is drawn from years of experience at leading companies, including Esurance, SoFi, LinkedIn, E-Loan, Deloitte, and GEICO. Hippo’s head of insurance, Richard McCathron, and head of compliance & legal, Angela Grant, each have more than 25 years experience in insurance.
It is no secret home insurance is one of the largest addressable markets in the world. With over 125 million households and 81 million homeowners in the United States, home insurance currently generates over $70 billion in premiums per year based on conservative estimates. Hippo’s total addressable market is over $19 billion.

The Future is Digital Home Insurance
Homeowners insurance is an extremely inefficient and antiquated industry in both cost structure and product delivery. Despite research revealing that most insurance falls well short of homeowner expectations, progress and modernization in the industry has been slow to nonexistent. Receiving a quote is cumbersome and the claims process is unnecessarily painful for customers. Like other industries (such as real estate sales), insurance is shifting toward tech-enabled models offering significant cost savings to increasingly informed consumers. The timing for Hippo’s tech-enabled insurance brokers is spot-on — today’s savvy homeowners are looking for a consumer-friendly option teamed with superior service.

Fifth Wall identified clear benefits for two key segments of the market:

Homeowners: Hippo found that more than 60% of homeowners are underinsured and view insurance as a large expense with few visible benefits beyond acting as a safety net. Hippo delivers a modern insurance experience with clear cost savings compared to alternatives.

Real estate developers: A home buyer cannot purchase a new home without mortgage approval, which requires proof of home insurance. Lack of mortgage approval is the most common delay to a real estate transaction closing quickly, slowing down a developers’ speed to sale. Hippo’s home insurance significantly expedites the process for mortgage approval and ultimately the purchase of the home.

Our investment in Hippo is the latest in Fifth Wall’s continued effort to disrupt the status quo across the entire lifecycle of home ownership. In addition to benefiting immensely from being plugged into Fifth Wall’s extensive real estate development partnership footprint across both single family and apartment developments, Hippo’s platform is significantly cheaper and streamlined compared to its traditional competitors. Hippo has everything in place to capitalize on the consumer shift to digital home insurance: superior technology, a highly qualified team, and distribution partnerships out of reach for competitors.

Learn more about Hippo and the strategic partnership on Fifth Wall’s podcast, where Brendan Wallace interiews Hippo Co-Founder and CEO Assaf Wand:
https://itunes.apple.com/us/podcast/assaf-wand-hippo/id1255221263?i=1000400443847&mt=2

Sources:
https://www.statista.com/topics/1618/residential-housing-in-the-us/