JLL Spark Investor: Ajey Kaushal

Continuing our JLL Spark investor series, Principal Ajey Kaushal shares his insights on CRE-focused venture capital – what he looks for in a startup and why an investment from JLL Spark brings unique value to a PropTech startup. Ajey brings a wealth of knowledge and humor to his investments and board roles which include qbiq, Sertis, Ren Systems, Re-Leased, and ALICE Technologies.  

What metrics do you look at when evaluating startups? 

For Series A and B companies, I look for: revenue (whether it is transactional or recurring and how quickly it’s growing), net revenue retention (ideally north of 120%, indicating existing customers are expanding), and gross margin (ideally 80%+ for SaaS businesses). While there are several other metrics we explore in diligence, these three are usually great initial filters.  

At the seed stage, these traditional metrics aren’t as useful. Instead, I focus on metrics like sales cycle (time to close/time to expansion), initial product time to value, and Annual Contract Values, or ACVs (how much is your product worth to customers). Bonus points if the company was very capital efficient in generating initial revenues. 

What are some common reasons you decide not to invest? 

The deal is too early/late for our focus, the company isn’t growing quickly enough (ideally 2-3x year over year), doesn’t fit the metrics profile I described above, we couldn’t see eye-to-eye on valuation expectations, or we didn’t see anything differentiated in the product or offering. These are typically early filters for us, and we aren’t shy of communicating that it’s a pass on the first call; while an immediate pass may sting to founders, we believe it’s ethical to pass early rather than feign interest and take undue time and energy during an already stressful process.  

As we dive deeper into diligence, there are several other reasons we may elect to pass that are more nuanced. Rather than spell them all out, I’ll summarize by saying we are looking for highly driven, top-notch founders building truly differentiated technology where JLL has a meaningful near- or medium-term ability to help the company scale. If our diligence disproves any part of that sentence, we will decide to pass :). 

What are your thoughts on our business model and growth strategy? 

JLL Spark is truly unique in the world of corporate venture and our model and strategy is a testament to that. Though all our capital comes from JLL, we are thoughtfully designed as an LP/GP fund so that we can align incentives across stakeholders (JLL, the Spark team, and our portfolio companies).  

Our team design is critical in unlocking that value. We broadly have two parts to our team: our investment team and our growth team. Think about our investment team as your traditional venture capital investors; we lead our investment exploration, construct and execute deals, and serve in startup governance roles. Our growth team is our differentiating secret sauce; they are the internal champions and representatives for our startups within the JLL ecosystem. They partner closely with each business line and efficiently navigate JLL’s organization to identify win/win opportunities for our portfolio companies. This model really hums when the investment team and growth team stay in lockstep with each other, so we can best unlock value for our portfolio and also align on future investment opportunities. 

Why should a startup take capital from JLL Spark? 

It takes a lot to win in our industry; it’s not enough to have the best technology. You need to deeply understand how this industry works, and you need partners who can help you refine your message, product, open doors, give validity, and be true champions for you. Spark helps connect the innovation ecosystem to one of the largest CRE services companies in the world, and in doing so, we can not only be a megaphone advocating for our early-stage companies, but we can also be a filter to help distill the trends across this massive market to help inform where our companies go next. On top of that (and I can’t stress this enough), a startup would be getting a strategic investment partner that is purposefully structured around and driven by the startup’s financial success, not other underlying motives. Simply put, we are the perfect blend of financial and strategic, and our portfolio’s growth proves that!  

Final thoughts… 

In the past decade, the VC landscape has evolved dramatically, with startups now having access to a multitude of funding sources. While securing backing from Tier 1 institutional funds still carries weight, it is equally important to find strategic partners that offer more than just capital. That’s where we come in.  

Connect with Ajey via LinkedIn or reach out to the Spark team at contact.spark@jll.com. 

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