Matchmaking startups and corporates: The story of Hubble and JLL
Our mission at Pi Labs is to reshape real estate globally, by creating a thriving ecosystem and backing the world’s best proptech founders. We believe that collaboration between incumbents and startups is the key to reimagining the world we live and work in. This is the story of one such collaboration.
Today, a rising number of startups and incumbents are working to bring new innovations to life and pursue fresh opportunities in collaboration with partners. It’s happening across industries and borders, and the trend is delivering a variety of new products, services, efficiencies, and other benefits. In the property sector, corporates and startups often rely on each other to thrive and survive, meaning that this sort of collaboration is critical to their long-term success.
Property incumbents need to work with startups to modernise their operations, access new innovation, and avoid the risk of being left behind. Survival is not guaranteed unless these companies find ways to adapt for the digital age. At the same time, traditional players are a vital resource for startups too — for example, by being new entrants’ first clients or helping new entrants roll out their tech to an existing customer base.
A great example of a corporate and a startup working together is the global real estate firm JLL and our portfolio company, Hubble, a digital platform matching businesses with flexible office space. After less than 12 months, the partnership between these two companies is already delivering value and opportunities for both sides. So how does it work and how widespread is the business-to-business collaboration trend today?
Sharing knowledge, experience and ideas
Back in 2016, a report from the ecosystem mapping platform OpenAxel revealed that more than half of the 500 largest companies worldwide were already collaborating with startups. Research from U.S. startup accelerator MassChallenge also found that 67% of companies prefer to work with early-stage startups when exploring applications of new technologies in their business models. We see it every day here at Pi Labs, where enabling partnerships between players — old and new — is one of the most rewarding aspects of our work.
As more and more of our portfolio companies seek collaboration with corporate partners, it’s important to unpick the benefits for each side. Established companies can play a significant role in supporting a startup’s market entry by offering knowledge based on long-term experience and direct mentoring for entrepreneurs. Incumbents can aid startups with scaling too, offering up people, budget and opportunities through their existing customer base. This is especially important for proptech startups, given that many need to collaborate or partner with physical spaces in order to test their ideas, learn and succeed.
JLL Spark, JLL’s strategic global venture arm investing in proptech startups, led an investment of £4 million in Hubble earlier this year, marking the Silicon Valley-based fund’s first-ever European investment. So what does this traditional player stand to gain from partnering with a startup? “Working with a startup like us offers clear benefits for a corporate entity like JLL,” says Tushar Agarwal, co-founder and CEO at Hubble.
Corporations are under increasing pressure to understand the shifts that new technologies are causing in their markets and to rethink their own business models in response. Innovation, therefore, is a crucial aspect of ensuring companies remain competitive in the future and can access potentially lucrative new business areas.
Building success through collaboration
External entrepreneurs are often best-placed to spot the latent potential in existing systems and models. This means that a close working relationship with a startup can result in game-changing, innovative solutions to move incumbent companies forward fast. Newer entrants are also more likely to innovate closer to the customer, since they, unlike their corporate counterparts, tend not to be driven by internal processes and norms.
Winning that first large incumbent customer can do wonders for the revenues and reputation of a startup, not least by causing a network effect. Corporate decision-makers usually want to see references before engaging in collaboration with newer companies, so establishing and measuring a clear use-case through an early-stage partnership can make all the difference for realising a startup’s ambitions.
“When we were a brand-new startup, it was hard to be taken seriously,” Agarwal notes. “Having JLL as our partner gives us a lot of brand credibility and that credibility has opened up a lot of doors. The real estate industry has been slow to adapt to new technologies, so the support of a trusted, well-known player has created fresh opportunities for us.”
Incumbent companies receive notable benefits for their involvement too. Perhaps most importantly is the cultural exchange that happens between the companies that partner. Startups tend to be entrepreneurial and agile in the way they work, which means they can offer useful lessons in openness and innovation for long-established players to modernise their own operations. Meanwhile, the incumbents have years of hard-earned experience and insights to share with younger companies.
New opportunities and revenue streams
Hubble and JLL have been collaborators since the beginning of this year, and their partnership has already yielded great results for both sides. This year, Hubble and JLL worked together to produce and publish a report called Flex and the City, offering insights and guidance on everything from location to budget for those seeking office space in London. Through this research, they were able to accomplish two attractive outcomes: Firstly, showcasing both companies as thought leaders in the real estate sector. Secondly, presenting the largest existing dataset on London’s flexible office space offerings in a useful and easy-to-digest format.
Data undoubtedly holds a place at the heart of the relationship. When the relationship began, Hubble already had several years of data analytics from real life service to share. This meant the startup could provide JLL with real metrics — which are notoriously rare and difficult to quantify within the flex sector.
“JLL has one of the richest datasets for commercial real estate, but it’s largely based on traditional metrics. As an online marketplace, we have a rich database on businesses searching for offices, representing different sectors looking at factors like price point, aesthetics, and location,” Agarwal explains. “That brings up some really interesting insights: For example, someone might first search for an office in Liverpool Street, but end up taking space in Mayfair. The landlords that JLL represent can use this data in their decision-making.”
By sharing data, Hubble can help JLL better advise its landlord clients on where they should open their next space and what it should look like. In return, JLL has helped Hubble test and scale faster than it could have on its own. As Agarwal puts it: “Access to JLL’s expertise on the market has been incredibly helpful to us, and we’re using it to inform our expansion strategy and ensure our approach to some of these landlords is driven by the data.”
Partnerships between Proptech startups and traditional real estate companies that are centred on technology, innovation, and digital transformation, are an increasingly powerful framework for all stakeholders involved. In our experience, success stems from identifying meaningful opportunities and building relationships that deliver value for everyone involved. If you’d like to find out more about our work at Pi Labs, subscribe to our newsletter for a snapshot of the latest proptech news and thought leadership from our team.
