How Greensoil inked a commitment from Liechtenstein Group

Greensoil PropTech Venture Fund II is close to hitting its $100 million fundraising goal by the end of this year, following a recent commitment from the Liechtenstein Group.

“Greensoil was selected  because their values align very well with ours,” Alexander Winkler, investment manager for the group, told affiliate title Venture Capital Journal. “They have a very strong team and also they focus on technologies which we’re very interested in, [those] concerned with building materials, building operations and building construction, which is also our focus.”

The new Greensoil vehicle is one of two proptech funds that the Princely House of Liechtenstein chose to invest in after nearly a year’s worth of discussions with many VC funds in that space. It’s the group’s first foray into proptech and only its third investment in venture capital, following an initial allocation to an agtech fund a year and a half ago.

Winkler declined to state the size of the group’s assets, but a sister company, LGT, is a leading privately owned private bank that had AUM of almost $286 billion in 2021.

Toronto-based Greensoil Investments launched in 2011 with a focus on technologies designed to make agriculture and food production more sustainable. Activities in those two areas account for about 60 percent of global CO2 emissions.

After closing on two funds in 2011 and 2013 for a total of $40 million, Greensoil broadened its purview in 2015 to include real estate, which is said to be responsible for the remaining 40 percent of carbon emissions. Its first proptech fund closed on $59 million in 2015 and it launched its second fund in March 2021.

Greensoil invests in early- to mid-stage companies in North America, Europe and Israel. Following four exits, its proptech portfolio currently consists of 18 start-ups, whose focus ranges from ventilation and remote property management using sensors to energy storage and electric chromatic smart glass, which can help regulate building temperatures.

Greensoil co-founder and managing partner Gideon Soesman said proptech is of interest to Liechtenstein Group “because they have a lot of real estate assets themselves, and like other LPs, they started asking themselves how to make their own assets more sustainable and efficient. They want more access to knowledge and dealflow”.

In selecting start-ups to back, Greensoil first ensures each is “making a real contribution” to the UN’s Sustainable Development Goals, Soesman noted.

Soesman and his colleagues dig into how each potential investment measures its own progress towards goals related to any SDGs it is targeting. “That’s part of our due diligence process,” he said. “We make sure they continue to report. We’re also looking at how the companies run internally,” including their governance policies and practices.

This year, Greensoil also began tracking its portfolio companies’ progress with regard to diversity and inclusion goals.

Greensoil brings extensive industry knowledge to the companies it backs. The firm’s co-founder and chairman, Alan Greenberg, spent nearly 30 years at the Minto Group of Companies, a Canadian real estate business. Under his leadership, MintoUrban Communities, which focused on condominium development and residential rentals in Toronto and Ottawa, reportedly became a leading green residential developer in North America.

The new Greensoil proptech fund has already invested in six companies. It typically writes checks of $2 million to $5 million in Series A rounds and occasionally Series B and C rounds.

The Liechtenstein Group targets impact investments in forestry, agriculture, renewable energy and real estate. Its own real estate holdings include Hunter Real Estate, which owns and operates residential properties in Boston; and ELV, which operates residential and commercial properties in Boston, Washington and Atlanta.

“Decarbonising the built world is a huge challenge,” Winkler told VCJ. “The technologies Greensoil focuses on and that we focus on are at the forefront of addressing that challenge.”

Channel for sustainable products

One of the energy-efficient technology areas that Vienna-headquartered Liechtenstein Group focuses on is distributed energy resources. That includes battery systems that let homeowners with rooftop solar panels sell energy back to the power grid. Greensoil’s portfolio includes companies such as Electriq Power, which creates battery systems.

“We’re currently doing analysis, together with our property managers, about the key pain points of our properties across the world,” said Winkler. “We have discussed our initial plan with Greensoil and in the next couple of weeks we’re working together to see what the best solutions are in Greensoil’s portfolio that can be applied in our buildings.”

Winkler cited energy storage as a technology that is sure to play a role in the Liechtenstein Group’s properties in the future. The ventilation systems that Greensoil portfolio companies such as Oxygen8 and Wynd develop are also of interest to the group, he said.

For its part, Greensoil sees enormous opportunity in another start-up, Home365, which charges a flat fee to property owners to manage their holdings based on AI-driven analysis of local socioeconomic conditions and vacancy rates.

“There are so many smaller investors that have a headache from trying to rent out their places and managing assets [in remote areas],” Soesman noted.

Home365 has been acquiring smaller management companies struggling to survive. In a year, its platform expanded from 500 to 7,000 properties, based on organic as well as M&A growth.

Soesman sees Home365 “as a potential distribution channel for sustainable products to those houses”, including those being created by other portfolio companies that will make Home365’s properties more sustainable, he said.