Moderne Ventures closes second fund with $200M, targets industry digital transformation
Since 2015, Constance Freedman, founder and managing partner of Moderne Ventures, and partner Liza Benson have built up a network of more than 700 executives across the real estate, finance, insurance and home services industries.
Today, their early-stage venture capital firm buttoned up an oversubscribed second fund, raising $200 million this time, to infuse capital into startups in and around those industries. Moderne's newest fund includes new and returning high-profile strategic partners like AvalonBay Communities, Camden Property Trust, Greystar, JBG SMITH, Leading Real Estate Companies of the World, funds managed by Oaktree Capital Management and Realogy. The Chicago-based firm now has $350 million in assets under management.
Freedman's background is in real estate, technology and venture, spending three years in sales and leasing before the dot-com" days. After getting her MBA at Harvard, she turned toward investing, launching a fund in 2008 that focused on information and media, as well as working with the National Association of Realtors, which wanted to invest in real estate tech. That $20 million fund became the predecessor fund to Moderne Ventures and where a lot of what the firm does now came from, Freedman told TechCrunch.
In fact, a big part of their strategy is looking at companies outside and bringing them in, Freedman said.
Industries like real estate are cyclical, so you don't want to be beholden to one industry," she added. If a company has that as its beachhead, but can expand into other industries, the bigger the market and bigger the returns for investors. We will also have a stronger fund as a result."
Moderne Ventures writes first checks of between $4 million and $7 million, and its sweet spot is companies with revenue of $2 million to $10 million. Most of its investments are late seed to early Series B.
To date, the firm has investments in more than 100 companies, including five unicorns, three IPOs and dozens of accretive financing events in the past year, Freedman said. Notable investments in the portfolio include ICON, Porch, Better Mortgage, Hippo Insurance, Homesnap (acquired by Costar), MotoRefi, Super, EasyKnock and Kaiyo. For its new fund, Moderne Ventures has invested in seven companies so far.
In addition to its fund, Moderne runs an industry immersion program called the Moderne Passport, to connect startups with that network of over 700 industry executives and corporate partners that can benefit from their services.
The program includes about 80 companies, and Freedman said Moderne will make meaningful investments in about a third of them." There is a class open right now, and the firm will have another one in seven to 10 months.
The firm offers a hands-on approach aimed at affecting a company's growth, including go-to-market strategy. Moderne facilitates over 1,000 meetings between companies and its network each year, often turning into pilot programs.
Speaking about the ton of artificial intelligence technology applications within its core focus industries, Freedman said more than $30 million is spent on marketing to people who aren't real buyers, but are just looking. Rather, Moderne Ventures is using AI and data analytics to help companies market to the right people.
We create a lower or no-cost way for partners to try before they buy to remove the sales friction," she added. In return, companies get exposure opportunities that they can't buy to accelerate their growth."