This 31-Year-Old Venture Capitalist Has Bet $12 Million On Real Estate And Diversity

As institutional landlords grapple with vacant buildings, and real estate startups fight for survival, one 31-year-old venture capitalist is betting his firm on the category bouncing back.

Stealth until now, Los Angeles-based VC firm Wilshire Lane Partners has invested $12 million in property tech startups in the past 10 months, says founding partner Adam Demuyakor, even as the spread of Covid-19 has battered the category. Demuyakor and Wilshire Lane have made six investments to date, alongside bigger investors such as Andreessen Horowitz and FJ Labs.

Wilshire Lane’s investments remain small compared to many VC firms. But beyond his real estate focus, Demuyakor stands out for a mission that hinges on closing the diversity gap in the historically non-diverse category. As one of the few Black founders and managing partners of a venture capital firm, Demuyakor says he’s using his unique position to commit that a majority of his portfolio companies have a cofounder or management team including at least one woman or minority person. Four of his six portfolio companies qualify. “We believe that that should be the new standard,” he says. “It’s not that we are an impact fund, I just happen to be a Black man of a fund that makes investments.”

Born the son of immigrants from Ghana, Demuyakor grew up in Gwinnett County, Georgia, about an hour north of Atlanta. After completing his undergraduate degree at Harvard University, he joined Morgan Stanley as an analyst, before moving to the Carlyle Group as an associate. When he began his MBA at Harvard in 2015, the real estate tech world was booming alongside the success of well-known companies such as real estate brokerage Compass, home-flipping platform OpenDoor and controversial office-space company WeWork. The following year, Demuyakor joined Fifth Wall Ventures, then a fledgling specialist firm and now one of the largest real estate tech investors with more than $1 billion raised across multiple funds.

Demuyakor is now looking to replicate Fifth Wall’s success, with a twist, at Wilshire Lane, which launched at the start of 2019. Half of its investments are in startups that focus on the restaurant industry, including “ghost kitchens,” a group of companies that privately manage cooking spaces and staff to deliver for restaurants struggling to meet the demands of food delivery. 

That sector, however, has faced some challenges, particularly during the time of Covid-19. One of Wilshire Lane’s most prominent investments was in Kitopi, the Dubai-based ghost kitchen startup that entered the United States at the end of 2019. Ahead of a Series B funding round for Kitopi in February, Wilshire Lane brokered the acquisition of a building in the Brooklyn Navy Yard, Demuyakor says, which Kitopi committed to occupying as part of its entry into the United States. But in March, as the pandemic arrived, Kitopi announced it was laying off 124 employees and exiting the U.S. market. 

Another ghost kitchen startup, New York-based MealCo, which has raised pre-seed funding from Wilshire and is expected to launch in coming months, has now committed to occupying the space, Demuyakor says, which is now owned by undisclosed new buyers. But Demuyakor’s own supporters hope that his fund will continue to diversify beyond the uncertain ghost kitchen market, which also includes a high profile early entrant in former Uber CEO Travis Kalanick’s business, CloudKitchens. “I would look more broadly at his strategy,” says Ed Mathias, a managing director at Carlyle Group and an advisor to Wilshire Lane. “For the time being these kitchens fall into that, but I don’t think that’s the key overriding concept.”

Another strategy Wilshire Lane is exploring is steering its portfolio companies to landlords, including Demuyakor’s cofounder and managing partner, Atit Jariwala, who is also the CEO of real estate-focused private equity firm Bridgeton Holdings. Bridgeton has been in talks with two of Wilshire Lane’s portfolio companies — Neighbor, an online marketplace for spare storage spaces, and Common, a New York-based co-living company with more than 50 locations — to acquire or lease property for use by the startups. “It is an advantage of ours, quite frankly, that our cofounder is the owner of a real estate private equity shop,” Demuyakor says.

In the meantime, Wilshire is betting that its diversity thesis will boost returns; Neighbor and Common both have women on their executive teams. It’s perhaps a relatively low diversity bar for startups to clear, but Demuyakor sees it as an achievable start. “If we could push to hit these marks, and insist on having diverse teams, then anybody could hit that mark,” he says.