The EG Interview: A/O Proptech’s Gregory Dewerpe on passion and purpose

When a fund is raised, everyone looks at the money. And why wouldn’t they? Funds are, by definition, collections of capital, and the investment currency should get a sizeable share of the attention. But the cold, hard cash is not the only thing that defines them. This is why you will never hear A/O Proptech founder Gregory Dewerpe referring to his VC business as a fund. “The term is very limiting,” he says. “People hear ‘fund’ and think you are just about investing. Actually, what we are doing here is building a firm. That means focusing on people, culture and what we believe in.” And therein lies the real insight into the company. The money in the firm’s debut fund – €250m (£244m) raised ahead of A/O Proptech’s launch in February 2020 – is evergreen because Dewerpe believes that is the right approach to tech investment in today’s constantly changing climate. The capital will be largely channelled into ESG-related investment because that is where Dewerpe and his team think it should be directed. Anyone in serious talks about securing finance from A/O Proptech will receive impromptu calls from Dewerpe so he can catch them off guard and get a better sense of who they really are. This information is worth its weight in gold. Getting to know the personalities and characters behind the funds – or firms, in this case – is arguably more important to Dewerpe than anything else, including the numbers on the spreadsheet. So this is the story of the man behind the money. The power of empathy Those operating in real estate technology will likely be well versed in A/O Proptech’s story so far. It burst on to the scene back in February last year and was widely hailed as 2020’s new kid on the VC investment block, launching with the biggest proptech fund in Europe and one of the biggest in the world behind Fifth Wall’s. It is also well known for the timing of its launch – a month before the world was hit by a global pandemic. Despite this, the company has since made 18 investments and committed to closing 14 deals valued at £40m across Europe, the US and Israel before June 2020. These included Bricklane, Fornova and property management platform Plentific, where A/O Proptech led the start-up’s €29m Series B round. The latter hit headlines earlier this year when it was hacked, resulting in a data breach involving client details. Dewerpe’s response was calm and, perhaps more notably, empathetic – “As investors, this is not something we get agitated about,” he said at the time. “It is part of day-to-day life, and I have been a victim of hacking and phishing personally numerous times. How you react in times of adversity is far more important than how you react when everything goes well.” His reaction was a glimpse of Dewerpe as a person, not just an investor; a clue as to what drives this Swiss financier and how he plans to take A/O Proptech forward. For him, the company ethos starts and ends with people and talent. How he is treated and how he treats others is a major part of who he is and how he does business following a formative and traumatising childhood experience. “I suffered tremendously from bullying as a kid for close to a decade,” he says. “I had cancer from when I was one until I was three. It was a disease that was not very well understood back in the early 80s, and when I went to school after years of treatment, I was smaller than the other children. So I was this tiny guy and kids can be very mean. It was almost 10 years of other kids not sitting next to me in school, and that sort of thing really sets up your personality. I have certain reactions to things now that I can see come directly from what I learnt and how I coped during that period of my life.” It is so important to care. That doesn’t mean you are not challenging the people you work with. It just means you create an environment that enables people to feel completely comfortable Indeed, it set him up to recognise when the time was right to step away from a world where success was judged on financial gain alone. A banker from 2005 to 2013, Dewerpe never felt it was the right role for him. “I generally disliked being a banker,” he says. “I became a hostage at the start, earning great money, but at some point you realise it’s very empty and I didn’t believe in most of the core values at the heart of what I was doing. You can’t be yourself if what you do professionally is not an extension of your personality.” Dewerpe’s step away from “financial success as a commodity” is not something he did just once when he left the banking sector. He has carried that mentality with him and applied it to everything, from company culture to how he makes investment decisions. “Obviously, we measure a degree of success based on how much money has been generated for investors and for us as a firm,” he says. “But it really does go beyond that. If you are not ‘mission-driven’, if you don’t think about how you treat people or how much you respect people, then you just won’t be able to attract the right talent,” he says. “It is so important to care. That doesn’t mean you are not challenging the people you work with. It just means you create an environment that enables people to feel completely comfortable and allows them to be who they want to be. Great talent cares about these things.” Purpose and profit The talent might care, but Dewerpe is under no illusions that this approach to company culture is still something the real estate industry is getting to grips with. He is hopeful that as society expects more and more from corporates across all sectors, the pressure to evolve will force the issue: “I have been part of this industry for a long time and it is tough, cut-throat and difficult. “In many ways it is quite a dysfunctional sector, but that means there is a lot of opportunity for change. Just being profitable, even highly profitable, is no longer enough. You have to have a purpose. Purpose and profit go hand-in-hand. I think a lot of companies are changing because they have to show the right signalling. But, in the end, and as much as an idealist as I am, it doesn’t really matter why they do it. If they end up in the right place, then that’s good enough.” In terms of what he means by purpose, Dewerpe says it varies from company to company and person to person. But for many, including A/O Proptech, it comes down to ESG. Dewerpe insists that unlike those changing to “show the right signals”, this is something that drove the creation of his new company. While it is not badged as an ESG investor, this is, for all intents and purposes, exactly what the firm is. “We had a clear idea when we launched about everything we touched being climate and ESG-related,” he says. “We got criticism from people who thought we were just saying that to say it. We have since made a number of ESG-related investments, but I must admit that I was nowhere near as educated back then as I am now on the real impact that real estate has on the climate. “Now I can say very clearly that we want to invest in companies that are going to improve the industry, make it more accessible, more digitally efficient and more data-driven, but we also want to leverage technology to promote sustainable living and the decarbonisation of real estate. From the way we source raw materials to the design, construction and operation of the built environment, we are seeing more and more opportunity in what we can invest in. “I could very well announce that our next fund will be an ‘ESG fund’ and raise another bunch of money, but instead I just want it to be integral to what we do. There should be no difference between backing a digital broker or a business that will help reduce the carbon emissions of a building because it should all be part of an ESG-led strategy.” Who can you trust? He refers to ESG investment as “the single biggest opportunity” of his life. The sense of urgency could not be greater, and the time for real estate to get its act together has well and truly come. “We seriously need to get out of our comfort zones as investors,” he adds. “It means not only backing obvious technology, but to start thinking about technologies that will only make sense in three, four, five years from now. We need immediate solutions, but we also need to be looking further down the line, and that’s challenging when you live in a world where you need to feel instant reward and get instant results.” He adds that it is not always easy to rely on an industry such as real estate for feedback on the various technologies available now and in the future. “You have to wonder, and I mean this with no disrespect, can you trust feedback from an entity that has ignored technology for decades? Can you trust their judgement on something that is potentially groundbreaking but will be painful to implement? Again, probably no. So we need to stay very independent in our thinking because some of the solutions that will thrive are not necessarily going to be the ones that are the most understood, valued or accepted at the moment. “This is why it was really important to be able to raise our first fund as an evergreen fund. There is no pressure to deploy and no pressure to exit because although we know change is coming, we don’t know how long it will take to unfold. I didn’t want to be in a position where I had to exit an investment right at the time it was starting to pick up.” Everything to prove Dewerpe has made a mark on the world of real estate tech in a remarkably short space of time and against a tide of external pressures, including a pandemic. Next up he has plans to launch another fund – planned for 2022, with a value that is yet to be disclosed – with a view to not just investing in but also incentivising more and more companies. With that launch he plans to bring more people on board and continue expanding the firm. “We have everything to prove,” he says. “We feel well-equipped and like we are in the right place at the right time. We want to make a difference, but that doesn’t just happen. You have to work really, really hard to make a difference.” One gets the distinct impression that working really, really hard is not something Dewerpe is going to shy away from, and when A/O Proptech’s second fund launches, here’s hoping that attentions will be focused on more than just the money.   To send feedback, e-mail emily.wright@eg.co.uk or tweet @EmilyW_9 or @EGPropertyNews Portraits © Leon Foggitt; Israel image by Walkerssk/Pixabay; New York image by Jo Wiggijo/Pixabay