Fifth Wall has closed a $100m Retail Fund set to invest in digitally native brands to accelerate their bricks-and-mortar expansion.
The California-based VC fund announced today that it had closed the retail fund which is backed by some of the largest retail real estate owners and service providers in the US and globally, including Acadia Realty Trust, Cushman & Wakefield, Macerich, and Nuveen Real Estate.
The Retail Fund will look to invest in emerging brands and retail concepts to “accelerate their bricks-and-mortar expansion through retail partnerships with Fifth Wall’s strategic consortium of more than 50 corporate strategic investors from 11 countries”. The news follows hot on the heels of Fifth Wall’s launch of its $200m Carbon Impact Fund last month.
Kevin Campos, partner at Fifth Wall, who leads the Retail Fund’s investments in omnichannel brands said: “New e-commerce brands know the importance of being wherever their customers want them to be at all times – they simply cannot reach their full potential if they remain solely online.
“However, digitally native brands often aren’t familiar with the challenges of retail real estate expansion and we have observed that many traditional VCs lack the experience to be able to meaningfully engage on issues like site selection, store design, merchandising, and staffing. Fifth Wall aims to support brands on these very issues. We have assembled a consortium that includes many of the largest retail real estate owners, and we believe they’ve invested in the Retail Fund because they want to see these new brands earlier and help them succeed with thriving stores.”
Fifth Wall added that, while it is easier than ever to start a new brand digitally, it is counterintuitively more difficult than ever to scale and differentiate a brand, without also establishing a physical presence.
The VC fund also expects to see the “most innovative users of retail space” come from outside of traditional retail categories. It identified flexible offices as a “uniquely complementary” tenant within shopping centres, and a highly efficient replacement for large format vacancies.
Fifth Wall has already made investments in emerging omnichannel brands and retail concepts, including Allbirds, Carbon38, Cotopaxi, Foxtrot, Heyday, Industrious, Interior Define, Madison Reed, Taft, and UNTUCKit.
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