1Mby1M Virtual Accelerator Investor Forum: With Zain Jaffer, Partner at Blue Field Capital (Part 1)

Zain Jaffer, Partner at Blue Field Capital, discusses trends in PropTech.

Sramana Mitra: Our focus today is primarily on the investing that you had recently started. If you want to set some context about your entrepreneurial background, that would be great.

Zain Jaffer: As soon as I discovered computers, I started to mess around, code, and design things. I’ve always been at it trying to build things. Sometimes, it worked out. Most of the time, it doesn’t. I have had a lot of attempts. All you need is to be lucky once. It can change your life completely. I had a big exit. It was $718 million back in 2019 when I started an advertising tech company.

I then transitioned into a capital allocator. I set up my family office where I started making investments. Then I decided to professionalize that. I joined a fund called Blue Field Capital. Our focus is unique. We invest in PropTech. These are startups that target the real estate sector.

Sramana Mitra: Why did you choose this sector?

Zain Jaffer: I would say it’s envy. As a founder, your entire net worth is tied up in one illiquid startup stock. Sometimes you just want stability. It takes a toll on you when your net worth fluctuates like that. When you raise tens of millions from investors, it’s scary. I saw people making money in real estate. Frankly, they’re not doing much. They’re getting great terms and getting cash flow.

I also saw the returns. The returns are amazing in real estate. Things just keep appreciating. Real estate becomes a cool part of the portfolio that you have. You have stocks, bonds, and alternatives such as crypto and startup venture capital. I also realized that a lot of people seem to be making money in real estate.

Now I’m on the other side, you make money because it’s so broken. 50% of the people don’t know what they’re doing. Also, there’s a lot of information asymmetry. The market seems really ripe where technology can come in, create transparency, and automate a lot of processes. It’s just a lot of old white money in America. There’s a mentality of not fixing things if it ain’t broken.

The world’s largest assets can clearly be run more efficiently. I wanted to start a company in this category. To start with, let me be a VC for a while and learn the dynamics of the industry. We’re in a unique position. I’m buying real estate. Blue Field has billions of dollars worth of real estate. We have a lot of multi-family apartments, hospitality assets, and senior care facilities.

What a great platform to be a strategic investor and also set up a venture capital fund. You don’t want to go after something that everyone’s doing. My thesis was you’ve got these large generalist funds that have an unfair advantage against all other funds. They can deploy capital in immense amounts. They’ve got huge amounts of capital under management. They can be broad sector players and can afford to come in at a later stage.

Normal VCs are getting crushed under that mentality. On the other end of the spectrum, you have niche players. You have players who are either geographically focused, sector-focused or size-focused. Then you either become the local person where I invest in Salt Lake City. It can be sector-focused where we only invest in real estate focus.

It’s an unfair advantage not only because we are sector-focused and stage-focused, but we have real estate in our portfolio. Theoretically, we can run pilots. We can get superior due diligence. I kid you not. I’ve seen VCs in the PropTech ecosystem get pitched a retail concept or an apartment concept. They call their residential broker who bought their billion-dollar home. When you have so much generality, you’re not able to do superior due diligence.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Zain Jaffer, Partner at Blue Field Capital
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