London PropTech Show 2023 — Success factors for startups, and innovation in Housing supply
‘Modular Housing is going to be key for the Real Estate industry’s ‘journey into the digital age’.
We were pleased to agree with this and some of the other comments about Housing at the recent London Proptech Show.
From 15–16 February at the Business Design Centre in Islington, London PropTech Show assembled leading international PropTech industry experts, policymakers, investors and entrepreneurs for two days of exclusive industry insights, networking and a world-class showcase of innovative products and services. Alongside an engaging conference agenda, it brought together the latest and greatest from the industry under one roof, with a massive exhibition space for trailblazing companies from across the global industry value chain.
Crisis was proud to have been the Charity Partner for this inaugural event. The event was a great opportunity to showcase our five PropTech portfolio companies and being chosen as charity partner, followed on nicely from winning the Social Impact Award at the UK PropTech Awards at the end of 2022.
The Real Estate Industry’s Journey into the Digital Age — Day One
In this panel session Kingma Ma, UK Managing Director at Proptech 1 Ventures raised that modular building is going to be key to solving three big present challenges:
- Housing
- Carbon reduction
- Retrofit
But highlighted that there are still core challenges to its widespread adoption:
- Cost — Modular construction has not yet reached the capacity to benefit from economies of scale and for those savings to be passed on to customers
- Conservatism — There are still those who want to stick to longstanding traditional building methods
- Regulation and covenants — More work is needed around the developing regulation in this sector to make it easier to secure finance and insurance
As an investor in a modular housing business ourselves Agile Homes, we see the growing role that modular housing must play in solving the housing crisis. This is both in terms of speed and affordability of delivery, as well as the sustainability and quality of design. It was encouraging to hear some of the associated challenges addressed in this forum and we look forward to continuing to showcase great work in this area.
Also in this panel session Sammy Pahal, Managing Director of the UK PropTech Association gave a piece of advice for Proptech Startups just setting out:
“Don’t go after the biggest customers first!”
She explained that this is a common mistake for startup businesses who in fact would be better placed to try and work with small and medium enterprises first. The sign off processes and layers of ‘red tape’ in large organisations are prohibitive for new businesses, especially if you consider cashflow and other challenges. We think this also provides the opportunity to develop your thinking, and iron out any issues before approaching larger, more sophisticated businesses, and you sometimes only get one ‘bite of the cherry’.
You’ll find more tips for businesses starting out later in this article.
Collaboration and co-production to drive innovation
A charity investing in for-profit businesses that can deliver on the aims of the charity is a new model. Doing so in the form of a venture capital investor, and consulting people with lived experience at every stage is even newer, and unique to Crisis — but we’re beginning to see more charities take a similar approach. That’s why we were thrilled to have the opportunity to share more about our model and approach with a new, private sector audience; to show how collaboration across sectors is the only way we will truly have an impact on ending homelessness. Sarah Hopley, Lead Venture Builder in the Venture Studio presented on day one of the event and we’ve shared some highlights from her presentation here.
Housing is a human right
The UN states that access to adequate and safe housing is a basic human right, and we believe it is fundamental to unlock the enormous potential of every individual.
Yet more than 203,000 individuals and families are understood to be experiencing the worst forms of homelessness in England, and that number is set to rise amidst the cost-of-living crisis and other macro-economic factors.
For context that is equivalent to more than the entire population of the city of Milton Keynes or Swansea.
Crisis predicts that this number will rise to 278,000 households this year.
Ultimately, our housing system is broken. There are currently over 1 million households on the waiting list for social homes, we need to build at least 90,000 new homes at social rent levels per year in England alone, in 2021 we had a net loss of 22,000 social homes, followed by a further 14,100 in 2021/22. We’re not building enough homes, especially the social homes that are needed for those most at risk of homelessness. There is no coherent Government strategy to get us to these targets, so we see a huge need and great opportunity for the disruptive potential of new ventures to plug that gap.
Impact investing to end homelessness
We made our first investments in 2021 into Lanu and Agile Homes. By getting those investments over the line we were to able quickly demonstrate the sharp ways in which we could add value to Crisis, and also demonstrate how we could invest in line with our mission. By being brave and ‘doing’ rather than spending too much precious time ‘thinking’, we were able to innovate much faster than is typical of the charity sector.
One of our more recent investments was into Urban Intelligence. This planning software is helping councils prioritise development opportunities with the greatest potential to deliver affordable housing and they aim to identify 137,000 sites for new housing by 2025.
We are now raising a £20m philanthropic fund that will enable us to continue this important work by investing in more than 70 companies over the next ten years.
Collectively our portfolio of ventures will build 10,000 homes let at social rent levels directly, enable hundreds of thousands more to be built and benefit 1 million people in either preventing or sustainably ending their homelessness.
If you can support us with this fundraise, then we’d love to hear from you Venture.studio@crisis.org.uk
Business driving factors and hurdles for PropTech Startups
Based on our experience of supporting mission driven ventures Sarah was pleased to moderate this panel discussion on the afternoon of day one about business driving factors and hurdles for PropTech Startups. The panelists were:
- Joey Byrne, Pacaso
- Avijeet Jayashekkar, Housestars
- Su Tugcu
- Callum Healy, Landtech
- Rebecca Nixon, The Portable Proptech CMO
Some of the key insights that came from this session included:
- ESG should not be an afterthought — you should be thinking about this very early on in your startup’s journey
In the Venture Studio we offer support to our ventures in developing ESG and impact frameworks, through businesses such as VentureESG.
- Customers are key — all the panelists agreed that working closely with their customers was integral to their product or service development and overall success. Get validation of product market fit with real customers as quickly as possible
We work closely with our strategic collaborator EY to help our ventures validate their product market fit, and give them opportunities to test their innovations in the market through networks such as the Disruptive Innovators Network.
- Focus on a lean but highly skilled team — It’s better to spend a bit more on fewer but more experienced people who really know what they’re doing and can help drive the business
We’re currently supporting two of our ventures by recruiting subject specific mentors and board members that can assist them with building out the best team.
If you could suggest one trait to a startup founder what would it be?
- Scalability (Rebecca)
- Resilience (Avijeet)
- Bold, but targeted (Su)
- Value (Callum)
- Focus (Joey)
One of the panelists, Rebecca Nixon created this video for The PropTech Growth Podcast that we think sums the event up well.
Thank you
We want to say a huge thank you to the London Proptech Show for inviting us to be Charity Partner for the event this year. We loved meeting all the people that came to our stand to learn more about our work and enquire about supporting us in some way.
If you think you could fund our work, are an individual with influence, or you or your company could support us or our portfolio of ventures, we’d love to hear from you.
References:
- Figure taken from Crisis Homelessness Monitor: England 2022. The “worst forms of homelessness” refers to people experiencing “core” homelessness and includes people who are rough sleeping, sleeping in cars, tents, public transport, squatting, hostel residents, people placed in unsuitable temporary accommodation (including bed and breakfast and nightly paid hotels), night and winter shelters, sofa surfers. For details on the definition of “core” homelessness see Housing supply requirements across Great Britain: for low-income households and homeless people.
- Population of towns in England
- The homelessness monitor: Great Britain 2022
- Housing supply requirements across Great Britain: for low-income households and homeless people
- 14,000 social homes lost last year and 1 million on waiting lists
