The property industry is in transition as new technologies change the way companies find and complete property transactions, manage properties, interact with third parties, and access and analyse data.
From the appearance of proptech panels at events like MIPIM to digital-focused hires, the industry is slowly becoming more technology savvy. These changes are being driven both by entrepreneurs with ambitious visions of how the future could look and early adopters within the industry. Their collaboration is the tipping point in the transition to a more efficient and transparent industry.
An increasing number of partnerships are developing between property and proptech businesses. For the tech companies, these expand market access and provide rich industry data. They also help to secure funding because partnerships with established industry heavyweights provide validation as well as stability.
For property companies, partnerships round out their product/service offering and enable them to increase touch points with their clients. Along with the traditional property companies, we are seeing incumbent proptech companies seek partnerships with newcomers. An example is that between Fixflo, a property repair reporting system, and Connells, Zoopla and Countrywide.
We are also starting to see partnerships between proptech companies. In an example of how companies can accelerate their growth and gain access to a larger customer base by partnering with vendors with complementary products, Hightower and VTS, providers of leasing management platforms, recently announced partnerships with CompStak. The partnerships will give landlords and brokers easy access to benchmarking data to accurately set rental levels and negotiate leases.
Beyond formal partnerships, new proptech companies are also focused on developing integrations with established providers of property and asset management systems. The new entrants recognise their solutions must co-exist with the systems their target customers already have in place.
Property companies investing in proptech is not a new concept; for example, real estate investment manager Meyer Bergman’s investment in pop-up facilitator Appear Here dates back to 2013. But we are seeing an increase in the number of property companies that are developing a proptech investment strategy and an increase of investments coming from incumbent proptech companies, such as Zoopla’s recent investments in Fixflo; Landbay, a peer-to-peer lender; Trussle, an online mortgage adviser; and PropertyDetective, a website that helps people make more informed decisions on where they want to live.
We expect to see more investments from traditional property companies and incumbent proptech companies as they mature. We also expect to see more strategic investments leading to full acquisitions such as Altus Group’s investment and subsequent acquisition of Voyanta. Altus, a global provider of independent adviser services, software and data solutions, made a strategic investment in London-based Voyanta, a real estate data management and analytics solution provider, and then acquired the company in 2014.
While this type of consolidation in the proptech industry has started, it is in its infancy. There are a few companies that have been active buyers in the residential sector, primarily Zoopla in the UK and Zillow in the US. Zoopla has invested in companies such as uSwitch and more recently Property Software Holdings, while Zillow has made 11 acquisitions to date with the acquisition of Trulia being the largest.
We expect to see more of this consolidation across the proptech industry as it grows and early stage technology businesses mature.
There is a noticeable level of excitement about innovation in the property industry and at Pi Labs our aim is to facilitate relationships between the industry and proptech companies to continue to drive this forward.
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