Expanding in Asia: Insights from PriceHubble’s journey in Asia
After highlighting Tractable, WeWork, and Exotec’s journeys in my latest articles, I wanted to share the story of PriceHubble, a Proptech startup founded in 2017 in Switzerland, which set its sights on Japan at the beginning of its internationalization. I looked back at the company’s journey with Julien Schillewaert, CEO of PriceHubble, who joined the team in 2019 as CEO after five years of experience in fintech.
PriceHubble was created in 2016 by Markus Stadler, the current COO, and Stefan Heitmann, the current executive chairman. Stefan went from partner at McKinsey to serial entrepreneur. Before PriceHubble, he founded MoneyPark, a leading mortgage broker in Switzerland, where he met Julien, who served five years in the company, including two as the CPO.
“At MoneyPark, being a mortgage broker, we sought to engage with customers much earlier in the purchase process, as well as aiming at maintaining the customer relationship after the transaction. Our knowledge of the industry led us to identify two main pain points: (1) the lack of transparency and (2) a very traditional approach with only rudimentary digitization of the real estate industry. It was clear from the beginning that these pain points were shared by many players and across countries and that we are able to solve them.”
That’s why PriceHubble was created; PriceHubble launched first as a provider of data-driven digital solutions, targeting B2C companies such as banks, wealth managers, real estate agents, mortgage brokers, IFAs and fintechs, to deliver powerful property insights that can be digitally embedded into their customer journey, transforming engagement and overall business performance. “But that was only the first step, because the potential that we could cover with our data in the market was much greater.”
PriceHubble expansion roadmap
From the beginning, the team knew that the Swiss market was too small to build a category leader, putting scalability and internationalization at the core of the company’s roadmap. Because the need for more data and insights in the real estate market is a global one. Starting in 2017 in France, PriceHubble opened its second country. The approach was either to expand organically or to acquire smaller local teams to fasten development. Among the ten countries in which PriceHubble operates, the split between organic and inorganic expansion is about half/half, with potential acquisitions being very diverse. “It was only in March that we made our latest acquisition, Dataloft, a leading UK residential market intelligence company with a team of highly professional and experienced residential market experts who know the UK market inside out.” With the acquisition, PriceHubble aims to further accelerate its growth in the UK and exploit synergies.
“Acquisitions vary greatly in size. It starts from one person “acquihired” to the acquisition of a 12 people team in the Czech Republic. In this last case, the country was not on our immediate roadmap. Still, the team was very complimentary, we had our product suite and the scaling experience, and they had a great momentum, the local knowledge and sales team”. When looking at expansions, PriceHubble assesses how complementary the target can be to access and/or accelerate the market entry by 12–18 months.
Assessing markets potentials: China and then Japan
When considering Asian expansion, PriceHubble first looked at China as the company was selected to be part of the Ping An Cloud accelerator. However, the team quickly realized that, given the lack of available reliable data in China, building a reliable AI model would be difficult. PriceHubble then looked for other prospects in Singapore and Hong Kong. Still, given the relatively limited size of these markets, the company decided not to pursue until a significant opportunity arose.
“When we did the final presentation in Ping An Accelerator, we met with a selection of Japanese conglomerates and companies that wanted us to be in Japan. We assessed the market opportunity, and it ticked many boxes: 1) Japan is one of the largest real estate markets in the world by assets’ value, 2) Japan’s real estate industry was surprisingly late when it came to digitization, 3) we thought there was sufficient data transparency/reliability to run our models. Most importantly, we had someone in our direct network based in Japan with a strong experience in Asia.
Building PriceHubble Japanese footprint
Data in Japan, although available, was still local and not consolidated. PriceHubble saw an opportunity to consolidate and exploit the data. In 2019, the team started working on a Japanese MVP and faced many challenges adapting to local specificities.
“The Japanese market is not used to the same interfaces. In Europe, most software interfaces are minimalist, whereas, in Japan, it is much denser when you look at websites. So we had to localize our interface to make it work. ”
From a model perspective, Japan’s market launch took PriceHubble longer than any other market.
“Now, entering a market would take us three months between the moment we decide to enter that market and the time we have a product’s first version. Japan took us longer for two main reasons: 1) Japan happened very early on in our expansion roadmap, and we needed to adapt our set-up for the market; 2) Japan also required more work on the data and features front.”
Indeed, PriceHubble faced specific requests from Japanese customers, such as identifying habitations exposed to seismic risks and predicting how it impacts real estate prices.
“It took us six months to build the MVP and a few more months to offer a valuable and high-quality product in line with our global standards but suited to the Japanese market.”
When it came to sales efforts, PriceHubble had a client-first approach. “Before engaging in marketing efforts, we wanted to talk with customers first.” Surprisingly, the first marks of interest came from prominent players such as Mitsubishi, who later became a customer. At the same time, PriceHubble started looking at potential partnership opportunities. “Partnerships help us a lot when entering a new market. We were looking for companies with a similar mindset, Japanese startups that would grow with us rather than legacy players. That’s why we partnered with Wealthpark.”, a Tokyo-based real estate management digital platform founded in 2018, which raised a total of $32m in funding.
Attending conferences and events proved to be interesting to meet with potential customers. The focus was on large customers as more education needed to be done on the B2B2C side.
“The Japanese market is surprisingly late when it comes to digital solutions for smaller players. That’s why it was easier to start with institutional. Because we focused on large portfolio managers, we could access large data sets and refine our models to make them stronger for B2B2C”.
“If we had followed our European standard, we would have left the market within a year.” In 2020, PriceHubble signed its first Japanese customers based on a strong product, also leveraging its Swiss brand: “As a Swiss company, we were perceived as high quality and localized the marketing approach to leverage this asset.” Within the first half of 2020, the company secured several customers, including a significant player.
Integration into HomeNet, an innovative real estate Japanese company, was Pricehubble first ibuyer use case in Japan. HomeNet is a leading purchase and resale service in Japan. The company work with several big logos, including Mizuho Bank, one of Japan’s three major mega banks that recently made the strategic decision to fully embrace HomeNet’s services as a valuable tool to support their lending decisions. HomeNet integrated Pricehubble’s valuation API into its operation to enhance the overall service quality for its customers but also experience a significant digital transformation (DX) impact on its internal operations, as stated by their head of implementation: “Previously, evaluating a single property would take us over five hours, but now we have achieved remarkable efficiency improvements.”
Knowing how difficult it can be to get the right connections to large corporates in Japan, we asked Julien how it went for PriceHubble:
“Getting big names was much more difficult in Japan than in Europe as we did not have the same brand awareness yet. The language barrier Imposed some additional challenges when we talked with top executives during client pitches. We sometimes needed a translator, which had a layer of complexity for pitching, negotiating, and convincing customers.”
As seen in other case studies, recruiting search proved to be complicated.
“It is fair to say that Japanese recruitment took us more time than any other location. Yet the long journey was worth it, as we could by now substantiate and confirm our strong position in the Japanese market, delivering excellent quality products to our customers.”
Achievements, lessons learned, and next steps
In Japan, after a gradual start, PriceHubble is experiencing strong traction from existing and new customers, achieving significant upsell and expansions on various use cases. More importantly, the company is creating value for its customers. When we asked Julien, what he would have done differently, he mentioned the sales proposition. “When we started marketing our products, we presented several use cases. We had customers wondering where to start. In retrospect, we should have focused on one use case and progressively expanded.”
“The learnings of the past few years have brought us forward in all areas. We are now well-positioned to continue scaling, acquire well-known customers, and develop new use cases with our existing ones.”
On more generalist topics, Julien shared with us three common mistakes that founders often make when expanding in other markets: 1) not conducting a preliminary assessment of the market they get into, 2) not adapting/clarifying their offer based on local specificities, 3) look for the unicorn person when hiring locally.
Now, PriceHubble is focusing on its core markets, including the UK, and strong from this learning, PriceHubble’s current goal is to keep momentum in Japan and bring it to success.
For other geographies, the company keeps an open eye: “Although we might not have the bandwidth to launch a new market in Asia, we are always looking at potential acquisitions that could help us expand inorganically. “
