How JLL Spark and JLL Technologies’ Alliances help drive PropTech startup success

One of the key benefits of securing an investment with JLL Spark Global Ventures is the opportunity to be part of a portfolio of startups with the potential for representation and referrals to JLL internal divisions, JLL clients, and other direct customers. This collaboration is facilitated through the coordination between JLL Spark and the JLL Technologies Partnerships & Alliances (‘Alliances’) team. By leveraging Spark and harnessing the power of Alliances, startups can propel their business forward, gaining access to potential growth, global market reach, and lucrative reseller and referral agreements with JLL. This enables opportunities beyond mere capital investment.  

JLL Spark, the corporate venture capital arm of JLL, is dedicated to empowering innovative PropTech founders. Since 2017, the fund has invested over $390 million in more than 50 startups spearheading real estate transformation across various sectors. By combining the strengths of the startup world with JLL’s profound history in the real estate industry, JLL Spark provides distinct advantages that set ambitious entrepreneurs on the path to success.  

Partnering with JLL Spark grants you access to JLL’s robust global network and extensive distribution channels. With a presence in 80+ countries, JLL’s expansive reach and long-established relationships open doors to extended markets and emerging opportunities. Accessing our worldwide client base, industry expertise, and market insights, offers the necessary ecosystem to rapidly scale your business and achieve accelerated revenue growth. Together, we will propel your startup’s business expansion plans.  

JLL Spark and Alliances recognize the critical importance of market validation for your startup’s success. By working alongside Alliances, we can evaluate the fit between your solution and the needs of JLL’s clients, determining the best path to unlocking additional revenue. Our rigorous vetting process ensures that only startups poised for success proceed, (and for those not yet ready, Spark’s growth team is there to assist). Equipped with JLL’s strategic support, marketing assets, and sales enablement, your company will have the opportunity to engage with both JLL’s internal business lines and its clients. Our goal is to support your startup from the time of investment; through growth, and ultimately, into an established market leader.  

It is through structured reseller or referral agreements negotiated with Alliances that your startup gains direct access to JLL’s extensive client base and benefits from our established credibility and reputation. We will guide you through a mature and detailed go-to-market process, ensuring thoughtful integration of your product or service into JLL’s commercial selling organization. This approach offers an opportunity to expand your customer base and revenue streams while strengthening your startup’s brand.  

As PropTech entrepreneurs, you develop solutions with the power to positively impact the commercial real estate world. At JLL Spark, we invest not only in your growth but also in your development through guidance, mentorship, and valuable resources meticulously tailored for success. Become part of a flourishing community consisting of other market-leading startups, industry experts, and forward-thinking investors, and help shape the future of PropTech.

Written by Bill Schulze, VP, Partnerships & Alliances at JLL Technologies

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

CVC series, part 5: Crossing the internal chasm 

As a strategic corporate venture capital firm, JLL Spark Global Ventures drives value to JLL, our clients, and our startups through the match-making of cutting-edge new technologies. Spark’s main goal is to align our investments with the strategic priorities of JLL and our clients. To achieve this, we engage in in-depth discussions with all levels of the organizations to ensure that new technology investments can (1) improve JLL’s internal efficiencies to help save costs or streamline processes, (2) address client challenges, (3) disrupt existing business practices, or (4) introduce new areas of business for JLL. In all four scenarios, our portfolio companies collaborate with the business in some capacity over time. 

As a result of our strategy, we also help our portfolio companies prioritize product requirements through delivering client insights, which also helps them improve their selling processes, client support, and marketing motions. It can also potentially lead to commercial sales arrangements. The level of support Spark provides to our portfolio companies depends on factors such as their alignment with JLL and client priorities, and the maturity of their product. 

As an example, in 2018, Spark invested in VergeSense, a company that developed a spatial analytics platform for real-time data on building occupancy and utilization. The company worked closely with a Spark Growth Principal to help them navigate through the JLL organization and deliver insight, distribution, and revenue through JLL and our clients. Extensive discussions with the sales team revealed that clients were seeking a technology solution to better understand space utilization for return to office strategies and portfolio rationalization. The Spark team worked very closely with the business to establish a reseller agreement with VergeSense, integrate their technology solution into JLL’s technology stack, provide support for the sales enablement process, and ensure effective training for the sales team on the solution. The outcome was a successful partnership between JLL and VergeSense, effectively addressing a client’s need and driving revenue growth for the portfolio company. 

Another example of how Spark drives value to our portfolio companies, is the startup qbiq, an AI-powered test fit and space visualization solution. This technology supports JLL’s internal needs by providing brokers with powerful tools that enhance their ability to close deals through improved visualization of spaces for clients. JLL signed a license agreement with qbiq, underwent product training, and established an internal process for distributing the product to brokers. Since implementation, the solution’s usage among brokers has grown exponentially due to positive client feedback. As a result, JLL and qbiq have formed a strong partnership to improve internal processes, and other JLL business lines are now exploring additional use cases with the company. 

Although different use cases and end-users, both VergeSense and qbiq are examples of how Spark helps our startups cross the chasm. This is an area critical to every startup’s success. The Spark team collaborates closely with key internal stakeholders and our entrepreneurs to help mature the products until they reach mainstream commercialization, which drives sales and revenue growth.  

As a corporate venture capital firm, it is challenging to drive strategic value for the business. However, through collaboration with executive leaders at JLL from each business line to understand their strategic priorities, to working with startups to understand and align their vision, we seek to maximize strategic impact using Spark portfolio company technologies. This allows us to work closely with our portfolio companies to deliver insights, distribution, and revenue, promoting growth and maturity. And it’s fun!  

Written by Danny Klein, VP of Innovation at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

2024 PropTech forecast from the JLL Spark team

Ajey Kaushal, Senior Investment Associate 

Given multiple geopolitical conflicts and major elections in key countries (USA, Taiwan, EU, Russia, India, UK, to name a few), 2024 will remain an unpredictable year for interest rates. However, the cost pressure continues to build for owners of lower-demand assets (i.e. urban office), and we will finally see meaningful asset transactions begin to hit the market ~Q3 onwards. 

Sustainability will continue to be a focal point for federal and global governing bodies, and we will see more legislation aimed at both asset owners and corporations to reduce their footprints. As a result, there will be increased adoption of technologies geared to actively reduce and eliminate carbon emissions (not just measure and monitor them). 

AI has taken the built world by storm and is creating lasting OpEx efficiencies. However, given the speed of adoption and limited expertise, we will unfortunately see increased reports of meaningful data breaches from our sector, putting the onus on owners to adopt and deploy cybersecurity technology. 

Given the volume of capital invested in and limited surface-level differentiation between new AI-powered companies, we will begin to see meaningful consolidation in the space, continuing into 2025. 

Arnaud Bouzinac, Growth Principal 

Though there are signs allowing cautious optimism as the US Federal Reserve has hinted that interest rate cuts will happen in 2024, in terms of VC investment, we can anticipate a market dynamic that will remain subdued. Investors will remain very selective about where they put their money and startups will have to manage their operations on a very tight budget and keep their cash burn to the minimum. Those not able to do so will continue to suffer or even disappear.  

The trend of corporations demanding of their employees to come back to the office more regularly (at least three days a week) will continue although there will be no return to the old 100% in office policy, leaving the future of work challenge still valid, with a big question mark on what to do with all the unused office floors / surfaces and how to make the office “commute worthy”. And there lies an opportunity for tech companies able to address this. 

In this context, we still expect startups with rapid ROI to do the best, especially if they can help reduce energy consumption and carbon emissions or generate pockets of efficiency that save hours of manual work or labor. AI will remain a hot topic in 2024 as the real estate big players will race to claim the status of leader in the field, while encouraging the development and adoption of AI-based solutions. A direct consequence from a real estate perspective will be an increased interest in data centers, as their development will accelerate, with an opportunity for tech companies servicing these assets at scale, focusing mainly on smart FM and energy efficiency optimization. 

Daniel Correa, Senior Associate 

After a year of subdued CRE transaction volumes due to rising interest rates and turbulent market conditions, I foresee a major opportunity for distressed asset sales sometime in 2024. I also expect a new generation of brokers and dealmakers that emerge victorious from this recovery by seriously embracing technology as a competitive advantage. 

There will be a heightened focus on sustainability in the Commercial Real Estate (CRE) market. More buildings will begin to adhere to green building standards (like Local Law 97 in NYC) by incorporating renewable energy technologies or undergoing sustainable retrofits. This will be driven by regulatory mandates and increased tenant demand for sustainable spaces. 

Growth of ecommerce will continue to propel demand for warehouses and distribution centers. The explosion of online ordering and consumer expectations for fast delivery will push companies to establish a physical presence in multiple locations, increasing demand for industrial real estate. Geo-political tensions have also highlighted the vulnerabilities of our global supply chains, which will advance the growth of scalable alternatives such as nearshoring and domestic manufacturing. This will result in a major opportunity for emerging markets like LATAM and the rural US. 

Although commercial office occupancy rates will continue to struggle, demand for best-in-class space in major markets will remain strong. This flight to quality will be indicative of the kinds of assets, services, technology, and amenities that top tier tenants are looking for. This will begin to carve out leaders in each space and further define the difference between a nice to have and must have. 

Technological integration in the property sector will likely increase. This means more functional use of AI, IoT, machine learning, digital twins, and Blockchain – not just for transactions, but for managing infrastructure, security, and real time data management. System standardization around smart building management where facilities and systems are interconnected will become more prevalent. 

Danny Klein, Vice President of Innovation 

The commercial real estate industry faced challenges last year due to high inflation and interest rates, resulting in lower transaction volume and limited investments in new technologies. However, towards the end of 2023, inflation started to decrease, along with mortgage rates, and a looser stance from the Federal Reserve. These positive developments position the CRE industry favorably for 2024. 

In 2024, there will be renewed interest from occupiers and investors to implement sustainability technologies to meet broader corporate objectives. Additionally, investors are likely to increase spending on smart building technologies to differentiate their assets with occupiers and improve occupancy rates.

While there may still be some challenges ahead, we will begin to see an improved landscape for the CRE industry. 

Laurent Grill, Partner 

When considering the incorporation of artificial intelligence (AI) across various real estate sectors over the next phase, several areas stand out where the impact of AI is expected to be significant in 2024: 

  • • Property management: AI can automate and optimize property management processes, such as tenant screening, lease management, and maintenance scheduling. Machine learning algorithms can help predict rental demand and optimize pricing strategies, improving revenue potential for property owners. 
  • • Asset management: AI-powered tools can analyze large datasets and provide real-time insights on asset performance, risk assessment, and portfolio optimization. This enables proactive decision-making, such as identifying underperforming assets and implementing strategies to enhance returns. 
  • • Smart buildings: AI can enhance the operational efficiency and sustainability of buildings by monitoring energy usage, optimizing HVAC systems, and automating maintenance schedules. AI-enabled smart building systems can self-adjust based on occupancy patterns, reducing energy consumption and improving tenant comfort. 
  • • Real estate investment analysis: AI algorithms can process extensive market data, including historical patterns, demographics, and economic indicators, to provide investors with accurate valuation models and risk assessments. This helps investors make informed decisions and optimize their investment strategies. 
  • • Real estate marketplaces: AI algorithms can personalize property search experiences, recommending properties that match a buyer’s preferences, budget, and location. AI can also enable automated valuation models, reducing the time and effort required for property valuations and transactions. 

Raj Singh, Managing Partner 

Macroeconomic conditions will not significantly improve until the end of Q3 2024 which means conditions will remain challenging for PropTech startups. Deal volume, dollars invested, and exits will likely be similar to 2023 levels, possibly saved by an uptick in Q4.  

Despite (or perhaps because of) the climate, seed stage startups will still emerge, focused on delivering quantifiable RoI around asset management, energy and sustainability, financial derivatives applied to construction to smooth out supply and demand imbalances and enabling the industry to deliver against increasingly tight regulation.  

Startups enabling RE companies to maximize the use of technology through education and services will build initial market traction as the industry attempts to benefit from generative AI solutions that bring significant efficiencies (although not yet new business models) and change the competitive landscape. 

Improving conditions towards the end of the year will have a number of the larger startups prepping for exits but likely M&A rather than IPO as few of them will be able to produce revenues above $100MM. 

Sean Wright, Investment Principal 

Commercial real estate prices will continue falling in 2024 but will bottom out mid-year when central banks begin lowering interest rates. 

Sustainability will continue as the dominant PropTech theme and will garner the lion’s share of PropTech VC investment in 2024. Similarly, sustainable building upgrades will drive real estate investment. 

By the end of 2024, AI will be commonplace in PropTech, and no longer a point of differentiation. For most prime office and residential space, AI will be working in the background to improve our experience and improve efficiency. 

Sonia El-Sherif, Chief of Staff 

In light of the upcoming elections and global geopolitical shifts, there’s an escalating demand for PropTech cybersecurity startups. These startups will be crucial in protecting real estate data, reinforcing smart building systems, including access controls and IoT devices, and aligning with cybersecurity regulations.  

The Middle East, especially Saudi Arabia and the UAE, is expected to experience significant growth in ConTech and PropTech, bolstered by major giga-projects, AI innovations and sustainability efforts. Additionally, India’s rapid development in broker tech, ConTech, AI, and IoT suggests a robust pipeline of groundbreaking PropTech innovations in 2024, contributing to global advancements. 

With the surge in AI-related demands and prolonged timelines for data center development, the industry is facing a shift towards alternative energy sources. I foresee an increase in startups specializing in renewable energy solutions, supply chain optimizations, and technologies to support evolving data center infrastructures, particularly in cooling systems to manage the high-power usage of AI components. These startups will be vital in ensuring the environmental sustainability and operational efficiency of data centers, catering to the growing energy needs of the sector. 

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

JLL Spark Global Ventures: Pioneering the future of real estate through innovation 

Technological advancements are transforming industries at an unprecedented rate, and the real estate sector stands to benefit tremendously from this revolution. Recognizing the importance of adapting and innovating, JLL, one of the world’s leading real estate services firms, established the JLL Spark fund in 2018. JLL’s forward-thinking approach to real estate acknowledges that the industry’s future prosperity requires seamlessly integrating technology across all service lines. Staying ahead of the curve demands more than just bricks and mortar. It requires a tech-driven mindset that transcends the conventional boundaries of the industry. 

JLL Spark recognizes the importance of identifying and nurturing technological opportunities. Tech startups have increasingly focused on the real estate space, building solutions that redefine the way we view and interact with the built world. Whether it’s virtual reality for immersive property tours (qbiq), construction technology to create more efficiencies in the build process (INGENIOUS.BUILD, OpenSpace, Alice), IoT (Internet of Things) for building automation (Infogrid, VergeSense, Safehub) or applications to enhance tenant experiences (HqO, SwiftConnect), these technologies are reshaping the landscape. 

Artificial intelligence (AI) stands at the cornerstone of this transformation. AI-driven solutions hold the potential to revolutionize commercial real estate operations. Imagine a future where AI-powered algorithms optimize building energy consumption, reducing costs and environmental impact. Predictive analytics can foresee maintenance needs, preventing costly disruptions, and enhancing tenant satisfaction. JLL Spark’s investment strategy focuses on sustainability, with AI playing a crucial role in enhancing these industry efforts. There are major innovations happening in smart buildings, which, when equipped with AI systems, utilize real-time data to autonomously adjust lighting, heating, and cooling, thus promoting energy efficiency. Furthermore, AI-driven data analysis can identify opportunities for sustainable practices, from green leasing strategies to reducing carbon footprints. Despite all the excitement around this new technology, AI is only as good as the data we input. JLL’s vast data set will allow us to leverage AI tools to the fullest, which starts with our most recent internally built product, JLL GPT.

For large real estate companies like JLL, embracing technology is not an option; it’s a necessity. JLL’s investment in startups through JLL Spark fuels innovation and provides a platform for pioneering entrepreneurs to transform the industry. By supporting these startups, JLL not only benefits from their innovative solutions but also contributes to the broader ecosystem of real estate technology. The JLL Spark fund empowers JLL to be a global leader in the real estate technology sector. By proactively investing in technology and startups, JLL ensures its relevance and competitiveness in a rapidly evolving market. The creation of JLL Spark is a testament to JLL’s commitment to shaping the future of real estate through technology and innovation. Embracing AI, identifying new tech opportunities, and supporting startups are essential steps towards ensuring the industry’s relevance and sustainability. In a world where change is constant, JLL stands as a pioneer, leading the way towards a more tech-driven, efficient, and sustainable future for real estate. 

Written by Laurent Grill, Partner at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Year-end reflection from JLL Spark

Hello! It’s the happiest season of all! The JLL Spark team made our 2023 predictions on January 5th this year, and it’s time to see how we did. 

And, well, we got a lot of it right. The team thought that it would be a tough year for non-Class A office space, that climate and sustainability would be important drivers of demand, and that AI would prove to be an invaluable tool in the commercial real estate industry. How right we were, and yet, how wrong as well. We thought money would continue to pour into the PropTech space, and although we thought interest rates would be an issue, the size of the problem took us by surprise, to say the least. 

As always with VC, there is luck and timing as much as there are smarts and great business plans, teams and execution. The smartest team focused on solutions for office is likely to have had a difficult time selling into a market where (in the US certainly) ‘return to office’ largely continues to be a CEO’s dream rather than the reality. Luck plays a role when, if you raised a large round 12 months earlier and took measures to significantly cut burn, your chances of surviving 2023 and 2024 are much improved, and ‘thrive in ‘25’ is a realistic prospect. 

Here at JLL Spark, despite the gyrations of the market, we still see a fundamentally healthy ecosystem for PropTech. The reasons why owners and occupiers might adopt technology are, if anything, more obvious and numerous than ever. While not every business is in the real estate business, real estate is in every business, and ensuring you get the most from the property you use, office, industrial, multi-family and so on, is increasingly a topic of conversation at the highest levels, especially given the associated financial investments businesses have made in the sector. 

While the need for technology is clear, what is also evident is that technology alone is not sufficient to provide the benefits we are all seeking. Establishing a plan is fundamental, but it is important to recognize that successful technology adoption requires the right people and the right set-up to maximize the value that technology can bring them (something that the adoption of AI will bring home in spades). This area of HR is something we as a sector have much work to do to improve our focus and ability to attract and develop the right people in our organizations. With great technology comes great expectations, and they can only be realized if we know what we are doing… 

We as a team are always grateful to our colleagues in the JLL Technology division and the broader JLL family for their partnership, wisdom and willingness to introduce exciting new startups to JLL’s clients in search of the innovations that can make a difference. Together we can further the mission of making JLL into the premier tech enabled services provider for the industry. Happy holidays to all! 

Written by Raj Singh, Managing Partner at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

CVC series, part 3: JLL Spark brings more than money

It’s no secret that the best startups get to pick their investors. Rather than desperately seeking venture money, they have multiple offers in every funding round. At JLL Spark Global Ventures, we invest in promising startups that are revolutionizing the commercial real estate industry, and we want to invest in the very best of this group. So, if you’re one of these best-in-class startups, why should you choose JLL Spark as your partner? The answer is simple; we offer much more than money. 

But first, let’s talk about money. We invest our money just like any other proper venture capital fund. We seek the best terms we can get, while finding a balance between our needs and the entrepreneurs’ needs. There may be cheaper money out there, but it’s never as valuable as ours, because our money brings so many additional benefits. 

Those benefits start with industry knowledge. JLL is one of the largest commercial real estate companies in the world. With an employee base of over 100,000, JLL generates $20 billion in annual sales from 300 offices in 80 countries. We serve the world’s largest real estate owners and occupiers. Furthermore, our investment management division, LaSalle, has $80 billion in AUM. We bring the knowledge of this organization to every investment and provide strategic insights that few others can bring. 

Additionally, we bring distribution. At JLL Spark, we drive revenue to startups in the JLL Spark portfolio by connecting the startups to our customer base of the world’s largest real estate owners and occupiers, and by driving internal use at JLL and LaSalle. At JLL Spark, we have a dedicated growth team whose main focus is to ensure our portfolio companies grow faster. Our growth principals will become your trusted advisors, constantly bringing you new sales opportunities, and helping hone your marketing activities. 

Lastly, we bring powerful branding. Having JLL Spark as a partner in your cap table sends a tremendous signal to the market that you have been vetted by and work with the best in the industry. Our portfolio companies regularly use the JLL logo on their websites and in their pitch decks, and JLL is often called upon by our portfolio companies to serve as a reference for future customers. We gladly take these calls. 

One more thing to note is that at JLL Spark, we are always on the side of the entrepreneur. Although we are part of JLL, we are set up as a proper fund, and hence, we share the same goal with the entrepreneur to maximize enterprise value. We will never ask for commercial exclusivity, a put/call structure, a right of first refusal on a sale, or engage in any other rent-seeking behavior that would in any way diminish the value of your business. We want you to make the most money possible, because when you make the most money possible, so do we. 

If you are a top entrepreneur revolutionizing the commercial real estate market, and we haven’t yet spoken, please be in touch. We offer much more than money, namely: industry knowledge, distribution, and branding, and our money comes with zero corporate baggage. We look forward to connecting with you. 

Written by Sean Wright, Investment Principal at JLL Spark based in Frankfurt, Germany.

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

American vs. European PropTech investment 

The rise of property technology, or PropTech, is unquestionably a global driving force in the real estate market. While the fundamental drivers of investment and adoption are similar everywhere, in this post we would like to offer a comparative analysis of how PropTech capital is deployed in Europe (European Union or EU + UK) and the United States. And there are some noticeable differences. 

As mentioned, on one hand we see similarities in the global factors and challenges that accelerate the growth of PropTech such as: 

  • – Shortage of staff and rising costs of labor 
  • – Rising interest rates and inflation 
  • – Uncertainty around the future of the office 
  • – Climate change and the need for more sustainable buildings 

However, out of the $19.8 billion invested in PropTech globally in 2022, the US still accumulated the lion’s share. According to a 2022 CRETI survey, the US amassed 43% of the total volume of investments with over 650 deals, way ahead of the EU at 250 investments, and the UK with about 130 investments. To mitigate this, the European venture capital (VC) market is catching up as it grew 6x over the last decade (1.5 times the US rate growth – source Sifted). 

So why does Europe, which is a much larger demographic market than the US at 742 million vs. 332 million people, receive significantly less investment and generate less deals? This can be explained in part by the fractioned nature of the old continent. Indeed, different languages, regulatory systems, and the lack of European-wide incentives for startups tend to create a more local and country focused mindset for entrepreneurs. This translates to smaller scale development plans, attracting less capital and attention from VCs.  

It’s worth mentioning that within the region, the UK sits in a unique situation. As proportionally to the size of its market (67 million people), the UK attracts a lot more capital for PropTech than the rest of the continent. Additionally, UK landlords are generally more tech savvy and adventurous than their EU counterparts, which is evident by the fact that a lot of UK startups very quickly look at the US for expansion due to similar legal systems and language compatibility, creating larger opportunities as these companies scale. At the same time, the UK often is the priority of expanding US tech companies and VCs, offering to the country an earlier and privileged exposure to cutting edge ideas.  

On the other side of the pond, US startups have a much bigger and uniform national market to scale upon, which requires larger capital injections to secure growth opportunities. The US-based VC ecosystem is more mature and developed, meaning more competition among investors, higher valuations, and, therefore, larger funding rounds. In addition to the presence of more PropTech focused VCs, other factors that explain the larger US volume include:

  • – A generally higher appetite for risk
  • – Higher operating costs for business (especially in tech hubs such as Silicon Valley)
  • – A more robust IPO and M&A market, providing better exit perspectives

European PropTech startups are subject to a more stringent regulatory environment than their North American counterparts on ESG standards, data privacy, and emerging regulations on AI, which can hinder product development and adoption. In some cases, however, this can have an accelerator effect for technology. In sectors like the energy transition, the French, German, and UK decrees in particular compel real estate owners and occupiers to drastically reduce their CO2 emissions. The circular economy – minimizing waste, promoting recycling, reuse of materials – also sees the creation and investment in an interesting new ecosystem of companies.  

Could it be that the European startups might actually lead globally on these pressing subjects? Only time will tell. 

Written by Arnaud Bouzinac, Growth Principal at JLL Spark based in Paris.

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

JLL Spark’s CVC series, part 3: What sets us apart

In the world of venture capitalism, corporate venture capital funds (CVCs) play a pivotal role in driving innovation and nurturing groundbreaking startups. Among them, JLL Spark Global Ventures stands out for our unique approach to investing in PropTech and built world technology. With a strong focus on commercial real estate, we strive to make a profound impact on the future of the built world. What are the distinct advantages and principles that set JLL Spark apart from other CVCs? How do JLL and our portfolio companies each benefit from this strategic partnership? Let’s dive in…  

  1. Aligning Business Lines and Cultivating Valuable Partnerships

JLL Spark differentiates itself from other traditional capital by ensuring that our investments align with our core business lines. By partnering with startups that offer innovative solutions, we foster mutually beneficial relationships that create value for both parties. However, we acknowledge that emerging technologies often outpace our ability to deploy them. This recognition drives us to actively pursue innovative companies that surpass our existing capabilities, propelling us towards the forefront of the built world’s cutting-edge advancements. 

  1. Embracing Independence and Agility

Unlike many CVCs, JLL Spark operates through a separate venture group that is solely backed by JLL. This freedom allows us to explore and invest in technologies that directly support our core business and client needs while focusing on mutual success. By maintaining a separate and nimble investment committee, we can assess deals efficiently and effectively. This structure ensures that our decision-making process remains agile and more closely resembles that of traditional venture capital firms, leading to better outcomes for our portfolio, both strategically and financially. 

  1. Long-Term Commitment and Support

With dedicated capital, JLL Spark takes an active role in building a robust portfolio. We are committed to supporting our portfolio companies, not only with initial investments, but also with follow-on capital, fostering their long-term growth. Unlike many other firms in our field, we often take lead positions in deals and fill board positions. We provide ongoing support, extending our strategic relationship beyond JLL to be the best investment partner possible. By positioning ourselves as strong minority partners, we help startups scale into multi-billion-dollar businesses, further enhancing the impact of our investments. 

  1. Driving Value while Achieving Financial Success

At JLL Spark, success is measured not only by financial returns, but also by the strategic value we bring to JLL and our clients. While this presents a larger challenge, it creates a win-win scenario for both startups and our organization. By leveraging our expertise and resources, we bridge the gap between innovative technology and real-world implementations, setting the stage for a sustainable future built on innovation. 

JLL Spark has established itself as a prominent force in the built world technology landscape. Our unique structure, independent venture group, long-term commitment, and focus on strategic value position us as a catalyst for innovation within JLL and the greater real estate industry.  With an unwavering dedication to our startup founders and a commitment to creating meaningful change, we continue to redefine what it means to be an innovator in the real estate space. 

Written by Laurent Grill, Partner at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

JLL’s Global Technology Survey: JLL Spark investments align with client and investor tech focus 

In the face of challenges within the VC market and the persistent uncertainties of the broader economic landscape affecting the commercial real estate sector, technology remains a paramount focus for investors, landlords, and occupiers. According to JLL’s latest Global Technology Survey, 85% of companies are increasing their technology budgets despite a difficult operating environment. This unwavering emphasis on technology can be attributed to several crucial reasons. 

The real estate industry is currently experiencing a significant digital transformation as technology revolutionizes how we live and work. Technology has become a catalyst for creating strategic value and facilitating new business models. It enhances decision-making capabilities and boosts productivity. Surprisingly, even in a difficult operating environment, more than 80% of companies are planning to allocate more of their budget to technology, according to the report. This trend is driven by the recognition that technology provides a competitive edge and improves tenant retention rates. In fact, 91% of occupiers are willing to pay extra for spaces that incorporate technology. 

JLL Spark’s investment focus aligns perfectly with the technology requirements of JLL’s clients.  

For occupiers, although the immediate focus is on supporting hybrid and remote working and attracting and retaining talent, there is a notable shift in sight. In the coming three years, occupiers will prioritize areas that enable real estate functions to serve a broader range of business objectives. While the return to office remains significant in the post-pandemic landscape, it is now seen as a fundamental expectation rather than a long-term driver of technology use. Occupiers are now directing their attention towards tools that facilitate a transition from reactive to predictive decision-making, such as lease management tools and insights dashboards. They are also seeking technological support to achieve strategic goals, such as emissions management. As illustrated in the chart below, JLL Spark has already made several investments that cater to the present and anticipated requirements of our occupier clients.

Technology is also becoming increasingly important for investors as they seek to address crucial business requirements such as design, fundraising, and asset valuation. Similar to occupiers, there is a significant shift from cost reduction to value creation among investors. They are now prioritizing the improvement of asset selection and management to enhance operating income, minimize vacancies, and explore new revenue streams. The priorities of investors reflect a more operationally intensive approach to managing assets, emphasizing the need for comprehensive building management solutions that ensure efficient operations and minimize environmental impacts. As investors move towards the next stage of technology adoption, they are focusing on digital infrastructure, including sensors, IoT systems, and converged building networks, as well as building automation, covering energy management, and sustainability reporting. The table below shows the investments that JLL Spark and the JLL Technologies division has made that address the current and future needs of our investor clients. In addition, JLL has invested in other technologies like Building Engines and Skyline/Horizon that have not been mentioned.

Over the years, JLL Spark has actively invested in ConTech, FinTech, smart buildings, and future of work, resulting in a robust portfolio of technology solutions that deliver significant benefits to JLL and our clients. As a strategic venture capital investor, JLL Spark remains attuned not only to the trends and developments in the PropTech industry but also to the unique business challenges, technology needs, and investment preferences of our clients. This deep understanding enables JLL Spark to continuously invest in the convergence of cutting-edge technologies and client demands, securing the perfect harmony between innovation and client-centric solutions. 

Written by Danny Klein, VP of Innovation at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

JLL Spark’s CVC series, part 2: Achieving financial and strategic returns

In a recent blog post, JLL Spark introduced our corporate venture capital (CVC) series, and discussed why corporations establish CVC units. In the second part of this series, we’ll talk about how to structure a CVC unit to achieve maximum value for the parent corporation (Parent).   

CVC units are created to deliver the dual mandate of financial returns and strategic returns by investing in startups and driving outside-in innovation through collaborations with the business units (BUs). In theory, it seems easy to achieve the dual mandate, but in practice many CVCs fall short of one or both goals. This is usually because incentives, responsibilities, and resources are not correctly allocated between the Parent, the CVC unit, and the BUs.   

The problems start for most corporations when they focus their investments purely on the “strategic” side, meaning the investments focus on collaborations, rather than the financial aspects of investment. Strategic CVC units tend to be driven by the goals of the BUs, and often require a BU sponsor and a collaboration to make an investment. But since the BUs don’t know how to make venture capital (VC) investments, collaborations take time (more time than the best startups need to raise money) and resources to bear fruit, and the VC team is not empowered to make the best investments, strategic CVC units tend to miss a lot of good opportunities and make a lot of bad investments. Many corporations look back five or six years later and wonder why their investment track records are so poor. 

On the other side, and lower in number, are the purely financially focused CVC units. They tend to have much better investment track records than their strategic counterparts, but they often don’t foster the collaborations that are necessary to create strategic value. That’s also not ideal for the Parent.  

Fortunately, there is a solution. In the last 20 or so years since CVC has become a big thing, a clear body of evidence has emerged that supports a winning strategy to achieve the dual mandate. This strategy has been followed successfully by CVC units from top global corporations like Google, Salesforce, Siemens, Bosch, Schneider Electric, and Hitachi, just to name a few. There are a few key principles for success that need to be followed to make this winning strategy work.   

First, the CVC unit must invest like a proper venture fund. Practically, that means the ideal CVC unit will have (i) investment independence within strategically relevant business areas, (ii) a proper fund structure with dedicated funding, and (iii) a carried interest plan to incentivize the professionals to make investment profits. VC is a difficult asset class, but with this structure in place, the CVC unit will achieve solid long-term investment results. 

Secondly, the CVC and the BUs need to be incentivized to promote and achieve successful collaborations with startups. The CVC unit needs to show relevant startups to the BUs and get graded and incentivized (usually as part of bonus payments) based on the deal flow it brings to the BUs. The BUs, on the other hand, must decide on and implement collaborations, ideally with portfolio companies. Often BUs are resistant to work with startups, and that can be for many reasons such as lack of funding or lack of motivation. This is where the Parent needs to help. It is very useful for the Parent to provide funding for proof of concepts with startups which does not hit the BU’s profit and loss statement (usually this funding comes through the CVC budget), and secondly to give financial incentives to the BU managers to achieve successful collaborations. When those tools are in place, the CVC and BUs are aligned and properly incentivized, and wonderful collaborations will happen.   

In conclusion, there is a relatively simple recipe to follow to achieve the dual mandate and maximize value for the Parent from its CVC activity. Below we lay out the principles for success in CVC: 

Written by Sean Wright, Investment Principal at JLL Spark

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