Alpaca VC unveils two new investment vehicles, including its real estate roots

Alpaca VC closed on $78 million in commitments for its third fund and launched the new Alpaca Real Estate platform.

Founded in 2013 by Ryan Freedman, Alpaca initially invested in real estate-focused startups. The multi-stage venture capital firm uses a research-driven approach and invests at the intersection of the physical and digital worlds.

It has continued to invest in proptech and construction tech, however, back in 2020, it began expanding outside the industry. Today it also invests in commerce enablement, blockchain infrastructure, consumer technology, the future of work, fintech and the creator economy.

Fund III brings Alpaca’s total raise to $194 million in capital commitments. Alpaca continues its focus on seed deals, with an average check size of $1 million to $2 million. Similar to prior funds, Alpaca is expected to reach a portfolio of approximately 30 companies with Fund III and will deploy it over the next three to four years, Aubrie Pagano, general partner, told TechCrunch.

“We typically sit on the board and help those companies get to the next phase of growth,” Pagano said. “One is helping them with downstream capital and thinking through that next financing. Then the other is we pride ourselves as all former founders on providing customer introductions and valuable partnerships to move the needle.”

The past month has been a busy one for new fund announcements. Alpaca joins firms, including Mercury Fund, Enza Capital, Mythos Ventures, P1 Ventures, Connect Ventures, Fuse, Blockchain Capital and Unconventional Ventures, in securing new capital commitments.

Meanwhile, the Alpaca Real Estate (ARE) platform, which will act as a private equity real estate fund, is a nod to the firm’s former life as Corigin Ventures. ARE came about when one of its anchor limited partners wanted to leverage the firm’s expertise in the industry to explore the area of the built world, Pagano said.

She also explained that the firm had identified an opportunity to help companies that need facilities, for example, for alternative home equity loans or to buy rural land or real estate titles.

“There's all these kinds of real estate that require someone to have capital on their balance sheet, and we've historically played matchmaker for that,” Pagano said. “The LP incurred not only a big chunk of Fund III, but also this new vehicle. It is investing in a new breed of real estate asset classes as well as traditional underpriced real estate, using institutional dollars to do so.”

Daniel Carr and Peter Weiss have joined Alpaca as partners to lead the new platform, which Pagano said will be run independently of the venture capital fund. ARE is anchored by capital from GCM Grosvenor.

Since 2020, the firm has doubled its team, which includes the addition of Pagano and five others, launched the Built World Fund I in 2022 and expanded its Field Study program.

Within the Field Study program, the team identifies and conducts 90-day research sprints into investable areas of the market. What comes from that are market insights and targeted opportunities.

Not every research sprint results in an investment, however, it enables Alpaca to move quickly when a good deal in that particular market does come its way, Pagano said.

“Half of our investments in 2022 came from our Field Study work,” Pagano said. “We are able to win deals and get up to speed really fast because we have this very nuanced point of view on what we need to see.”