In 2017, JLL started JLL Spark Global Venture Fund, a venture capital arm. A year later it announced that it planned to invest upwards of $100 million into real estate technology startups. Recently, the company said that it had made more than $340 million in investments since June 2018.
In 2019, then-head of growth in the Americas at JLL Spark described the fund as aiming at being “be hyper focused on growth, understand the business’s core clients and how those clients operate, understand the product, and be able to take a product and disperse it through a client’s organization.”
It’s not unusual for larger companies to develop venture capital arms, particularly in the technology arena, with Intel, Qualcomm, Comcast, Cisco, Microsoft, Google, Samsung, and Meta all examples. The practice isn’t limited to traditional high tech. Patagonia, Walmart, Toyota, and even 7-Eleven all have their VC funds.
Large companies look to achieve at least three things. One is staying ahead of the competition. New services and products that are relevant to their industries can help big companies become more innovative by paying others to do it. A second is to undertake their own obsolescence. If something is going to make big changes to your industry, best be involved and not become a victim of someone else’s new ideas. And third, there can be great returns on investments.
Unlike many traditional venture capital firms, these VC arms typically have access to deep expertise in the fields in which they invest. JLL, for example, is a major CRE player in multiple ways. Currently, according to the JLL Spark press release, the company is putting money into startups that “support investor and occupier clients with innovative solutions in construction tech, ESG, fintech, smart buildings, and the future of work.”
Some of their investments include VergeSense and its platform that “provides contextualized insights about how spaces are really used by leveraging an optical sensor network combined with artificial intelligence.” Then there’s Safehub and a “combination of proprietary sensors, analytics and third-party data to provide real-time, building-specific structural damage information” that’s useful in estimating earthquake damage and gauge business interruption losses.
Besides money, there’s a major benefit JLL Spark can deliver to startups: contacts. “An investment from JLL Spark offers access to JLL’s extensive CRE client roster, including its global distribution and scale,” the company says. “More than 60 percent of JLL’s investor and occupier clients use a JLL Spark portfolio company solution.”