The Everest Newsletter: Commercial, October ’18 Edition
Insiders say PropTech is positioned to be a real estate game-changer
Here’s how the commercial sector is about to be ‘Uberized’
Just the Peaks
This newsletter, at a glance
Over the past few years, tech startups have attempted to capitalize on Uber’s winning formula, bringing real-time information, frictionless mobile transactions, paperless correspondence and cheap everyday services to the masses. While their ambitions are great for the average consumer, industry mainstays are scrambling to compete as new companies continue to crop up with the next best thing in digitization and automation.
It was only a matter of time before the trend hit the real estate industry. Coined PropTech, this sub-category of financial IT is somewhat confusing to understand. At the end of the day, it refers to the ‘Uberization’ of all things related to the commercial, residential and construction markets. This digital transformation is not only affecting consumers as they search for homes, apartments, vacation rentals, office spaces, and the like. It’s also bleeding into the investment side of things, as PropTech has become the latest shtick for hopeful Silicon Valley startups.
What is PropTech, per se?
“In short, it stands for all the companies that are taking on the real estate industry to make it better, spurred by an ever-changing digital landscape and new consumption patterns,” says Vincent Lecamus of Medium. “It is still a new trend, and its scope will surely evolve as time goes by.”
Pundits like Lecamus admit that not all bandwagoning businesses will succeed. With so many competing at the moment, the majority is likely to fail. Still, the trend remains a lucrative new space for venture capitalists. Antiquated aspects of the real estate industry are long overdue for a makeover, whether it’s our paper-filled portfolios, lengthy transactional processes, or time-consuming managerial tasks. The fact is: there’s plenty of PropTech money to go around.
Take a look at some of the statistics surrounding this fast-growing movement, courtesy of today’s top real estate tech researchers.
The Power of PropTech
$221M Total global financing raised for real estate tech in the year 2012
$2.6B Total global financing raised for real estate tech in the year 2016
$4.4B Value of Compass, the first PropTech brokerage to surpass $1B
1 year The time it took for PropTech investments to triple [2016-2017]
$12.6B Total global financing raised for real estate tech in the year 2017
96% PropTech investors who plan to invest the same amount in 2018
Appetite for disruption
Aggressive investors looking to be smart about their future endeavors should continue to track PropTech’s impact over the next few years. Strategists say that while early startups centered on consumer-based platforms, newer ones are catering to the needs of property builders, developers, property managers—even commercial investors themselves. New problem-solving tools, administrative platforms and automated marketing services have the potential to shake up the industry in profound ways.
“Overall, we are actually in this period of really significant disruption in the real estate space, broadly and globally,” says Clelia Peters, co-founder of MetaProp, a leader among today’s PropTech seed funds. “Real estate is the largest driver of GDP globally, and it really is one of the few major sectors of this sort that had, up until this point, broadly been undisrupted by technology.”
Everest’s heightened level of commitment extends across all areas of commercial real estate. This includes tech-focused trends—like PropTech—that streamline property matters and challenge the status quo. For continued success, embrace tech integration and its powerful investment possibilities.
Not ready for the great ‘uberization’?
Brace yourself for the next big wave
with more Everest insights coming soon