By Jade Francine
Back then, Proptech (the combination of “Property” and “Technology” words) was a new trend and the number of startups was quite limited. Technology was mostly seen as a cost and convincing real estate corporates was challenging. To be honest sometimes we felt a bit lonely among all the blue and grey suits talking about investing million and billion to change the city and not really interested into technology 🙄.
5 years on and things have changed. Tech is now a key topic at each MIPIM edition.
In a post Covid world, technology and data offered by Proptech startups has been considered as one of the main solutions to better monitor buildings, anticipate costs and improve business efficiency. Real estate assets owners and managers have realized that in order to move fast and adapt, they could collaborate with startups, organizations which have a totally different DNA than the real estate corporates.
More recently ESG constraints have turned into a reality. Investors, regulations, increasing energy’s price and interest rates have forced the industry to pause and really think about its future. I can’t name all the initiatives and discussions being launched but the most daunting challenge facing the real estate industry today and over the long term remains climate change. No doubt about it. The industry has answered positively to the challenge and accepted the role its plays and the responsibilities it carries. The global real estate market is worth $362trn but is responsible for 40% of the world’s carbon emissions. For this reason it stands front and centre in the adaption to climate change.
PropTech can play a vital role in supporting and helping the industry achieving its targets.
What I have observed over the last 5 years 👀
- PropTech is large enough to cover all the aspects of the real estate industry : from transaction, operations, constructions, energy optimization and so on
- VC funds have strengthened their expertise in PropTech with dedicated vehicles, partners and larger amounts to be deployed in the ecosystem
- More women are entering the PropTech scene Tamara from Mokki, Eliane from Witco, Tara from Commune, Saskia from Virgil
- Less Proofs of Concept and more sustainable business is offered to PropTech by corporates
- Less Head of Innovation being appointed and more decentralised decision-making and open-to-innovation processes.
What I predict 🔮
- Real estate is really complex and too many PropTech startups only address a very small portion of the value chain. Despite the quality of their technical solutions, they sometimes add a layer of complexity. Such companies may disappear.
- PropTech startups need to address international portfolio’s challenges. It is the way real estate is structured : massive investors with multi-local portfolios.
- A lot of of M&A to come in this area. The number of PropTech firms has been booming over the last 4-5 years yet a lot of them are too small to survive.
- Assets owners and managers start getting a bit tired of dashboards and data, they want to see real transformation on their buildings. They’ll be ready to pay for it.
We’re all looking forward to seeing this transformation to happen. I believe that’s why ongoing conversations must happen among corporates, startups and users. At MIPIM or anywhere else.
Can’t wait for MIPIM 2024.