A look back at 2023: Innovation, Impact, and Global Transformation
As we wrap up our 9th year of Pi Labs, we’re taking a moment for a much-needed reflective pause. 2023 unfolded against a backdrop of global uncertainties, economic shakedowns and industry transformations. The lasting effects of COVID-19 have continued to demand resilience, adaptability, and innovation. Our journey at Pi Labs mirrors the continuous evolution and collective progress across the built world.
While we nurture our home-base in Europe, this year, the Pi Labs team went global. From New York to Vegas, Denmark to Berlin, Dubai to Hong Kong: we’ve travelled far and wide to connect with stakeholders in the real estate and proptech industry.
Our message has centred around the pivotal role of European tech in shaping the global built world sector: with every startup we invest in, our goal is to contribute to creating a better built world, addressing challenges that impact almost every aspect of life on this planet.
Investment landscape
We have doubled down on our expertise in impact-led investments, with 80% of our investments this year having a clear ESG impact. The built world, as one of the biggest emitters of greenhouse gases, has the capacity to make a real difference to our future on this planet, and meaningfully contribute to the future of our cities, accessibility and affordability of housing, healthy buildings and communities, resilient businesses, and the future of work.
This year, we deliberately pushed the boundaries of traditional “proptech,” seeking innovators and technologies from adjacent sectors. We believe some of the most transformational innovations for the built world may well come from outside our immediate sector.
We invested in 9 new companies this year, and made 8 follow-on investments:
By tackling ESG reporting, Omnevue specifically addresses the digital gap for SMEs to report on non-financial metrics. Omnevue’s mission was central to our 2023 white paper Strength in numbers.
By tracking sustainability within the built world, Responsibly tackles a critical challenge — measuring Scope 3 emissions — making it easier for real estate operators and managers to embrace sustainability and reduce their environmental impact.
By streamlining the logistics value chain, improving visibility, efficiency, and automation, Stockoss has the potential to digitise and decarbonise the built environment, particularly in logistics and distribution, one of the fastest-growing segments in the sector.
By scaling up construction decarbonisation, Tangible makes it easier for businesses to find, manage, and report on low-carbon materials during the construction process.
Our most diverse cohort yet
In 2023, we successfully completed our eleventh Growth Programme. Through this initiative, our commitment to transformative innovation has not faltered. We believe in innovation’s potential to impact not just the UK or Europe, but the entire world — shaping the future of our cities, how we live, work, build, move and experience.
For Cohort 11, we backed five companies led by visionary founders who are tackling some of the most pressing environmental, social, and governance challenges we are faced with today.
Untap Health is transforming how we manage public spaces for healthier buildings and communities, while Airmo empowers governments and organisations to make decisions mitigating climate risk.
By aiding businesses in navigating the future of work — Ambr aims to bring balance to workspaces to better cater to the diverse needs of today’s workforce.
By contributing to construction decarbonisation — Trunk will facilitate a more sustainable build process using low carbon construction methods.
By empowering fast-digitising sectors like real estate to tackle major governance challenges — Kertos is addressing one of the most significant governance challenges of our time, privacy compliance.
SHOUT OUT TO OUR ECOSYSTEM
From industry recognitions to transformative funding rounds, our portfolio companies have been making waves….👏
The first-ever fully exited Proptech Fund
This year, we announced the full divestment of our inaugural fund, Fund I — marking a groundbreaking accomplishment in the proptech industry. As the world’s first proptech-focused fund, Fund I was at the vanguard of the subsector’s investment. We backed 10 promising pre-seed stage startups, including OfficeRnD, LandTech, and Switchee, at a time when the industry was still grappling with understanding proptech’s value, well before it became a recognised high-growth asset class.
This achievement represents the industry’s first fully exited proptech fund globally, a momentous step forward in our journey. Fund I not only met but surpassed expectations, delivering an impressive 10.24x return on investment — a performance that outshines the top decile of venture capital funds since our inception in 2015 by a remarkable 220%.
These results are instrumental in attracting institutional capital into our sector, serving as a vital bridge between strategic and institutional capital and propelling our industry forward. We take immense pride in this accomplishment and its positive impact on the proptech landscape.
Expanding into Asia
In another exciting development this year, we expanded internationally with a new Hong Kong outpost. To spearhead this expansion, we’ve appointed Akina Ho as Venture Partner.
This new presence in Asia has been driven by our increasingly global investor network and our growing requirements for specialist proptech investment expertise in the region. Coverage of the Asian markets from Hong Kong also brings significant strategic opportunities for our portfolio companies to expand into the region, capitalising on the local demand for market-shaping proptech innovation.
We are excited to grow our existing ecosystem of founders and investors, bringing a highly collaborative approach to the Asia proptech scene. We will look to share nearly a decade of learnings on proptech, and partner with the Asia-based real estate groups leading the charge for change in the built world.
Staying one step ahead
Venture capital is at its best when it thinks laterally. At the beginning of the year, we published our A piece of the action white paper which quickly became a global go-to resource for real estate professionals, academics and entrepreneurs alike who are interested in the growing trend of fractional ownership and democratisation.
Accompanying the public launch of our first paper of 2023, our in-house research team increased its momentum, breaking the boundaries of the sector and challenging business-as-usual. Noteworthy pieces of work include in-depth deployment case studies to educate the sector, commentary on the ethics of generative AI, offering a means of valuing “psychological ownership” of spaces, applying our 2022 metaverse research to Apple’s announcement of their Vision Pro device, pondering the property company of the future, quantifying the cost of needless red tape in housing ownership transfers, and appraising the learnings derived from 12 months of generative AI hype. This research has global reach and influence, not only keeping our limited partners, government ministers and wider ecosystem informed of the forces impacting the built world, but also educating students at both the University of Oxford and New York University. All inclusive, the Pi Labs team produced more than 100,000 words of original research and insights during the 2023 calendar year.
2024, here we come
2024 will be a watershed year. It not only serves as the 10-year anniversary of Pi Labs, but consequently, also 10 years of “proptech” venture capital. It is also expected to be our largest year to date, both for investment and in other areas of our business. While headlines over 2023 spoke to the “drying up of funding” in the wider start-up and venture capital sector, we observed resilience in the built world (particularly in sustainability), and we’re now seeing early signs that valuations are strengthening. In many cases, the strengthening is resulting in record-breaking valuations at the Series A stage and elsewhere. We remain stoic, however, and continue to execute on our mission despite short-term noise in the market that has little bearing on the longer-term challenges faced by the built world. Suffice to say there’s a whole lot of work to do, and we’re geared up for the challenge.
