Property Tech, the next wave of startup investment opportunities in Australia.
Property Technology, otherwise known as Proptech will be the next wave of investment opportunities not only in the startup world, but for everyone. This is because everyday people are already being impacted by proptech without necessarily knowing it.
According to Deloitte Access Economic, there are now over 3.7 million nights being booked on Airbnb across Australia and Airbnb as an industry in Australia, is now worth over $2 billion dollars supporting 14,000 jobs. And that’s only Airbnb.
In Australia, the still popular website stayz.com.au was founded in Sydney in 2002 was sold to Fairfax for $12.7m in 2005 and then resold to a US based firm HomeAway for $220m in 2013. Going back a bit further, realestate.com.au or REA (founded in 1995 in Melbourne) and domain.com.au (founded in 1999 in Sydney), which arguably have contributed to the property boom in Australia, as it allowed for greater activeness and access to the property market to both domestic and overseas investors. In recent years, a new startup called NextAddress founded in Ballarat by Julie O’Donohue allows people to buy and sell their home online without using a real estate agent.
In a similar vein, a startup called OurWalls, is a platform matching fair and reasonable landlords and tenants to strike up long term relationships and removing the need for property managers. Maurice Molan, cofounder, said, “we believe that landlords with existing tenants deserve a better deal. By only paying for services as they need them, landlords avoid paying unnecessary and expensive management fees.”
And then the likes of 2ndLease, cofounded by Alex Brown, enables the transient lifestyle of the millennial consumer with subscription access to household goods. Customers can access all the furniture and appliances they need to live comfortably without the hassle of ownership, transport or maintenance, and in one simple package. In speaking to Alex, he said, “we want access to those essential household items to be as convenient and flexible as ordering takeaway or streaming a movie.”
Slotting nicely between these startups is Lodg.com.au (pronounced Lodge). Lodg is a subscription based rental model which delivers renters a superior customer experience with all bills included in the monthly rent and guaranteed returns for landlords even if the property is vacant with their ‘Zero Vacancy Guarantee’. Lodg cofounder Nick Teulon believes the current model is broken saying, “The property management industry is one of the most bizarre market systems ever invented, where the landlord is the client, yet the renter who actually pays the mortgage is often forgotten about. We believe both the landlord and renter should be equally advocated for and have developed a unique business model to do just that.”
Proptech, like all new industry segments also has some drawbacks which opens the door for more innovation. For instance BnbGuard technology monitors rental properties on behalf of owners, mitigating the risk of tenants attempting to sub-lease or place the property on AirBnb without permission. This has become an increasingly important issue as BnBGuard founded by Reuben Schwarz points out “Unwanted Airbnb’s in apartments buildings raise costs, create security worries and destroy community feeling”.
Housing affordablity issues in Australia has made home ownership a distant dream for many renters, however Kohab is changing that as the worlds first digital platform & marketplace for co-ownership (co-living, co-investment and co-lifestyle). Founder David Dawson said, “Kohab aspires to be the global platform and marketplace for property co-ownership.”
This brings us to proptech focussed on the smart cities or smart building category. This includes smart locks (operated by phone or sensors), energy tracking, other leverage and integrations of Internet of Things (IoT) or drones and autonomous vehicles, as well as innovative uses of new building materials and construction methods. Melbourne based business, Equiem founded by Lorenz Grollo, based out of Melbourne’s famous Rialto Towers (also built by the Grollo Group), develops intranets and intelligent platforms to connect and manage large commercial buildings, workplaces and retail spaces.
Finally, there is a proptech category which is more linked to the fintech industry. These are property technologies which allows for part ownership and investments into the property market. Companies such as BrickX, is a platform listing residential properties allowing for investors to fractionally invest and own properties for as little as under $100. There are also versions of this idea using blockchain technology. Blockchain is a decentralised and distributed technology which is allowing for the potential to more securely store land title information, as well as smart contract functionalities and options to transact using cryptocurrencies.
In speaking to BrickX CEO Anthony Millet, he said that, “whilst the property market has been delivering very strong returns over the last 20 years, the majority of Australians have been missing out. BrickX has opened up the property market to everyone, providing access for under $100 through an easy to use fully digital platform. With over 11,000 investors, BrickX is enabling a new generation to invest inline with the housing market for their home deposit or whatever their savings goals are.”
With 2017 being the year that created many blockchain and cryptocurrency millionaires, 2018 could be the year in which proptech follows suit. With this in mind, a group of proptech startups are forming a proptech startup alliance to bring better access, information and profile to this emerging sector. Check out the next proptech event in Melbourne.
PropTech’s mentioned in this article
