Century City-based venture capital firm Wilshire Lane Capital has entered into a strategic partnership with Morgan Properties, one of the country’s largest apartment owners. The financial terms of the partnership have not been disclosed.
Wilshire Lane Capital, which was founded in 2019, invests in companies focused on developing technology for property management or other real estate industry needs, a field also known as proptech.
The partnership is for Wilshire Lane Capital’s newest fund, the company’s third fund in which Morgan Properties serves as the anchor investor. Morgan Properties manages more than $15 billion in assets and more than 95,000 units.
“We have always been very focused on innovation and technology across our entire company,” said Jason Morgan, principal of Morgan Properties and president of Morgan Properties Special Situations. “Given that that has always been in our company’s DNA, teaming up with Wilshire Lane Capital was just an absolute no-brainer.”
Adam Demuyakor, founder and managing partner of Wilshire Lane Capital, said partnerships like this one allow Wilshire Capital “to have an extension.”
With the Morgan Properties partnership, Demuyakor said the company “plans on growing rapidly.”
He said he is continuing to look for “best-in-class startups” to partner with and help Wilshire Capital expand.
“These partners are key for us in generating value,” Demuyakor said.
The partnership with Morgan Properties, he added, will allow the company to do “really awesome things in the multifamily sector” and make businesses want to select the company to get Wilshire Lane’s “exclusive access to Morgan Properties’ innovation team.”
“This is our first major foray into multi-family,” Demuyakor said. “We think that multifamily is a really exciting category. … One thing we learned during the pandemic is that no matter what, you have to have a place to live.”
Morgan said that, for years, Morgan Properties has been wanting to get more involved in venture capital and is constantly evaluating proptech companies for its own portfolio. Working with Wilshire Lane Capital, he said, would add “valuation ability, sourcing ability and a totally different skill set that we don’t have” in evaluating proptech companies.
“We’ve set up this partnership to last,” he said. “From our perspective, this is very unique for Morgan Properties. It’s not something that we have ever done before, but we’ve decided to team up with Adam because we realize the amount his team at Wilshire Lane Capital can bring to the table”
Looking forward, Demuyakor said, the company would continue to invest in companies “that are adjacent to real estate.”
“When you add technology solutions on top of real estate, it can lead to really explosive outcomes,” he said, citing companies like Airbnb Inc. as an example of what’s possible.
“We’re investing in a lot of companies we think are next in line,” Demuyakor added.
Wilshire Lane Capital is also looking for companies with diverse teams. Of its current investments, more than 40% are led by women and more than 20% have Black founders.
“We are looking for groups of people whose management team matches their customer segment,” Demuyakor said.
For the most part, the company is doing Series A and Series B investments, helping companies in the early stages grow.
Property technology is a rapidly growing industry. In 2021, $32 billion in private investment was made in the sector, according to data from the Center for Real Estate Technology & Innovation.
Demuyakor said he planned on growing his company rapidly, investing in the sector.
“We think it’s (the partnership) really unique for the proptech industry,” Morgan said. “There really isn’t anything similar to this which is transformative, and we’re extremely excited about it.”
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