New fund revitalizes shopping malls by supporting entrepreneurs

America’s startup-investing frenzy has reached the shopping mall.

On the prowl for retail innovation, Simon Property Group, the nation’s largest mall developer, has funneled roughly $20 million into 18 startups, mostly over the past 15 months through its venture-capital arm, Simon Venture Group.

In June, Simon invested $1 million in Union Station, an online bridesmaid’s dress rental service. In an early meeting, the two companies brainstormed ways that Union Station—which currently operates a showroom at its New York City headquarters and runs pop-up events around the country—might eventually develop a presence in Simon malls. J. Skyler Fernandes, managing director of Simon Venture Group, has also introduced the startup to roughly a half-dozen possible investors.

Simon Property chief executive David Simon (no relation to reporter) launched the fund last year as a way to get better access to startups. The fund is a wholly owned subsidiary of Simon Property, a real-estate investment trust, which operates nearly 200 malls, outlets and other retail properties. Simon Property has about $4.87 billion in annual revenue.

Mr. Simon approves each investment, which can range from $250,000 to $5 million. The Indianapolis-based company had previously made a handful of ad-hoc investments in startups. One of Simon’s startup investments has already produced a return: Shopkick Inc., a shopping-loyalty app, was acquired last year by SK Telecom Co. for $200 million.

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