Fifth Wall, the fast-growing real estate tech venture firm, revealed Monday that it has scored $140 million for its Early-Stage Climate Technology Fund. That's up from $116.8 million earlier this month, when the firm last disclosed its fundraising efforts for the climate investment vehicle in an amended SEC filing.
In December, Fifth Wall announced it had brought in prolific clean-tech investor Greg Smithies to head its efforts to "decarbonize the built world." That's when the firm went public about its plan to raise at least $200 million to invest in climate tech. The firm said today that it has brought in another partner to co-lead its climate team: Peter Gajdoš, the San Francisco-based former head of venture investments for wealth management group IPM.
Last year, Fifth Wall co-founder Brendan Wallace predicted that the real estate industry would one day become "the biggest spender on climate tech for no other reason than its contribution to the carbon problem."
Fifth Wall declined to comment publicly on the fund when reached for comment last week by dot.LA.
With backing from Montreal-based Ivanhoé Cambridge, which holds tens of billions of dollars in real-estate assets, Fifth Wall's climate fund led a $16 million investment in Sealed earlier this year alongside actor Robert Downey Jr's climate fund. Other real estate investors in Fifth Wall's climate fund include Equity Residential, Hudson Pacific Properties, Invitation Homes and Kimco Realty Corporation, Fifth Wall announced Monday.
New York-based Sealed is on "a quest to retrofit the U.S.' existing residential building stock and help them run more efficiently," Smithies wrote in June. Part of that equation involves getting homeowners aboard the heat pump train.
The technology could help American households considerably slash carbon emissions by 142 million metric tons annually, according to research released by Carbon Switch.Sealed is one of at least three startups backed by Smithies in recent months, per the investor's LinkedIn. Others include Austin-based 3D-printed buildings startup Icon, which announced a $207 million late-August raise, and Emeryville-based pea milk company Ripple Foods. It disclosed a more than $57 million raise around the same time.
This story has been updated to include the latest fundraising figures from Fifth Wall.
- LA Tech Updates: LA's Largest VC is Now a Public Benefit Corp ... ›
- Fifth Wall Joins the SPAC Boom - dot.LA ›
- Fifth Wall Venture Firm Is Now a B Corporation - dot.LA ›
The University of Southern California was among a group of universities awarded a $15 million grant from the National Science Foundation to invest in and incubate startups.
The new program is called NSF Innovation Corps Hub: West Region. USC, UCLA and UC Riverside are among the participants, along with Caltech, the University of Colorado Boulder, the Colorado School of Mines, University of New Mexico and the University of Utah. The plan is to add more university affiliates as the program develops.
The colleges will identify potential startups and provide mentoring, campus resources and labs to help standout companies develop. Each university will also monitor work happening in campus labs that might lead to the next big company.
USC Viterbi School of Engineering will lead the program, guided by Dean Yannis Yortsos.
"There is a big diversity of the population in the West," Yortsos told dot.LA, "and so that's something that we also are going to focus on. The idea is to also engage more and more other institutions in this and keep increasing the footprint."
The program will look to invest in scientists, engineers and entrepreneurs who are people of color or "from the many diverse backgrounds of the Western United States."
It won't directly invest in startups. Instead it will look to connect startup companies to potential investors. "We are helping people demystify the process of innovation," Yortsos added.
The USC-led West Coast hub is one of five that the NSF is investing in. Each will receive $3 million every year for five years, contingent on progress milestones, rather than one lump sum upfront.
Yortsos said "the emphasis is on funding deep technology — by this I mean, technology that is not simply creating an app for something, but doing something that has fundamental technological value that can then essentially transform the landscape in different ways, whether this is bioengineering, defense, aerospace [or] artificial intelligence."
Yortsos pointed out that several big technology companies started with support from the government or NSF funds, including Qualcomm, which was created by USC Engineering School namesake Andrew Viterbi.
"Viterbi started with a startup and this startup was funded by National Science Foundation grants," Yortsos said, "then it became what is known as Qualcomm."
"Google, in some sense, came out of intellectual property that was developed by support within Stanford," Yortsos added.
The I-Corps Hub West will also give its startups opportunities to show off their work and court potential investors at technology scouting showcases and by leveraging its existing connections with accelerators and national laboratories. No companies have been selected for this year's class yet; the program begins in January 2022.
The National Science Foundation created the I-Corps in 2011, and a decade later is adding this division to focus specifically on emerging startups in West Coast markets. The NSF reports that since the program's ceration, roughly 1,280 colleges and universities have helped launch over 1,000 startups— and those companies have gone on to raise more than $760 million in funding.
Correction: This story was updated to clarify that USC was not the grant's sole recipient.
- WeAreNoCode Teaches Non-Tech Founders to Build SaaS Startups ... ›
- Amazon Is Building a Machine Learning Research Center at USC ... ›
- USC Gets Funds to Create a Contract Tracing App for Students - dot ... ›
- CSUN's New Tech Campus Aims to Bring More Latinos Into Tech - dot.LA ›
Rent-a-Romper, a kids clothing startup that launched to make "life easier for parents while reducing the burden of clothing on the planet," just made its first acquisition and raised a $150,000 angel round. The L.A.-based company plans to raise as much as $1.7 million more in the coming months, but can it make good on its goal of building "a more sustainable future for children's fashion?"
The five-person startup rents clothing to parents of fast-growing children, with the aim of cutting down both the time it takes to shop for apparel and the negative impact that disposable fashion has on the planet. Currently, Rent-a-Romper offers subscriptions that range from $9 to $63 per month.
The business recently snapped up San Francisco kids' clothing retailer ARLi in a cash and equity deal, enabling it to expand its inventory and — ideally — create a more environmentally friendly future for kids fashion.
Fashion's Role In Carbon Emissions
The fashion business is responsible for around 10% of global carbon emissions and is "widely believed to be the second most polluting industry in the world," according to the United Nations. Some have suggested clothing rental companies could be a sustainable alternative to fast fashion and a solution to fashion's disposability problem.
One recent study study — published in Finnish scientific journal Environmental Research Letters — is skeptical. It found that rentals can actually be worse for the planet, in part because of the high emissions generated by transportation and dry cleaning. The study's brutal takeaway: renting clothes can be "less green than throwing them away." Some businesses have contested that conclusion.
"Our focus, right now at the beginning, is on two key areas. The first one is extending the life of clothing as long as we possibly can," says founder and CEO Lauren Gregor. "And the second one is around diverting waste from landfills."
Rent-a-Romper tracks when clothing leaves its inventory and built its model anticipating that items could be rented out two or three times before they need to be retired. That turned out to be a conservative estimate, according to Gregor.
"We have items in our inventory that have now gone out to their sixth family and still have life in them," she says.] "And we're tracking which brands are more durable. We have over 150 brands in our inventory, so we're just gathering a ton of data."
To date, the company hasn't sent any of its clothes to landfills. Gregor pointed to partnerships the company has formed in Los Angeles to recycle textiles and donate clothes with life left in them. One such partner is South Gate-based Fybraa.
Rent-a-Romper also doesn't dry clean.
"We wash in cold water in high efficiency washing machines," says Gregor. And when items are stained, "We have a process where we'll soak it in natural, plant-based detergents and then we get it in the sun. Good thing about being in Southern California is we can do that, and it's one of the best ways to sanitize naturally."
But transportation, another culprit laid out in the study, is core to its business — and Rent-a-Romper's biggest expense.
"So we're really trying to be as creative as we can about bringing that cost down," says Gregor, who noted the company uses compostable mailers and recycled packaging.
Down the line, Gregor aims to open up regional centers to cut costs, speed up deliveries and reduce shipping emissions.
"We're small. We're a startup. So we're doing what we can, but [we are] very conscious about trying to make continuous improvements in those areas."
Providing Parents Another Option
Dr. Greys Sošić of the University of Southern California, whose research includes supply chain sustainability, wrote in an email to dot.LA that "renting kid's clothes could actually be beneficial for the environment" — with the caveat that she's not reviewed any hard data on Rent-a-Romper.
"I assume that moms, having other things to worry about, would not want to exchange kids' clothes every week or every two weeks," she said, "which are some of the 'fashion' rental terms, and would prefer to keep them for at least a month, or until their kid outgrows them. This reduces the biggest negative impact of apparel rental, which comes from clothes shipping and cleaning."
Without the option to rent, Sošić writes, "moms have to either regularly buy new clothes and dispose of the items that their kids have outgrown" or "rely on their personal network of friends and relatives who might have had kids before them and have some apparel that their kids cannot use anymore."
Rent-a-Romper plans to introduce new products this fall, expanding into seasonal and special occasion attire as well as one-time rentals. The startup may also grow its inventory to include apparel for older kids later on.
"We're really focusing on customer acquisition and perfecting our delivery as we bring ARLi in," says Gregor. "As we go out to raise this next round, the key things that we're going to be focusing on are our customer technology — as a circular business with massive variety in our inventory, technology is something that will be one of those levers that really help us scale."