Decoding PropTech Startups

Technology has reshaped all aspects of our personal and professional life. Alien till very recently, digitization has today got embedded with how we live and work.

As a result any industry looking to grow or even sustain in these tech-focused times must transition into tech or internet based platforms. In fact realizing the opportunity (or may be threat for some), most of the industries are already adopting technology very fast.

Real estate sector, the most customer centric sector is no exception. Proptech is reshaping all aspects of real estate business today.

What is Proptech?

So what is Proptech? Proptech is the acronym of property technology or the technology for the real estate space. It is the adoption of technology in all aspects of property from land planning and property development to delivery of homes and its management.

It involves software, hardware, materials, manufacturing etc. Some examples are property portals facilitating property transactions, hardware such as sensors, materials like special bricks acting like batteries for solar panel, 3D printing etc.

Therefore whether it is customer experience, construction management, marketing, facilitating property transactions or even property management, proptech is fast becoming the game-changer in the real estate industry.

PropTech Startups: Key areas of operation

While you can find tech innovation in almost all areas and phases of property development life cycle, proptech startups can broadly be grouped into four areas i.e. Project Development, Investment and Financing, Brokerage & Leasing and Property Management.

Proptech startups are mostly found in brokerage and leasing space followed by property management, project development and investment and financing. These startups have made each process more efficient, time-effective and economic. The sub-verticals within these major verticals are as follows:

Brokerage & Leasing Property Management Property Development Investment and Financing
  • List & search
  • Brokerless list & search
  • Tech-enabled brokerage
  • Co-working
  • Data & analytics
  • Sales, marketing & CRM
  • Agent matching
  • Tenant management
  • Third-party handymen
  • Drones & clean energy
  • Smart home fixtures & controls
  • Construction / Materials marketplace
  • VR & 3D
  • Architecture & construction tools
  • Design inspiration / services
  • Personal loans
  • Crowdfunding

 

PropTech: Disrupting technology impacting real estate

CBRE in its report titled ‘Proptech in India: Looking Towards 2030’ has identified six disruptive advancements that are impacting the real estate strategies in India. The report reveals how real estate stakeholders – developers, investors, occupiers and employees –are currently being influenced or would be influenced in the future  by these technologies across the life cycle of an office building.

Technology Area of influence
Software-as-a-Service (SaaS) / Cloud Computing
  • Improving pre-construction and construction efficiencies
  • Pre-empting risks to enable better decision-making
  • Predictive property maintenance
  • Portfolio analysis, benchmarking and optimization, etc.
Artificial Intelligence (AI)
  • Automating property management processes
  • Improving valuations’ accuracy
  • Augmenting ESG (Environmental, Social and Governance) management
  • Improving workspace design / management etc.
Internet of Things (IoT)
  • Creating dynamic data sets
  • Portfolio optimization
  • Transforming workplace solutions
  • Enhancing end-user services, etc.
Robotic Process Automation (RPA)
  • Chatbots as personal assistants
  • Enabling investment / location decisions
  • Automating property management processes
  • Improving work environment, etc.
Virtual Reality (VR) / Augmented Reality (AR)
  • Enabling virtual inspection of construction sites / properties
  • Improved construction efficiencies
  • Reduced TAT and informed decision-making
  • Improving employee collaboration, etc.
Blockchain
  • Maintaining efficient records of portfolio history
  • Facilitating and optimizing real estate investments
  • Creating smart contracts
  • Developing an ecosystem of partners etc.

Source: CBRE

PropTech: Outlook

With rapid urbanisation, the emergence of the middle class and millennials, COVID-19 forced internet penetration and rise in digital literacy are few of the factors that make the environment conducive for growth of proptech and proptech startups.

A Housing.com research titled ‘PropTech: The Future of Real Estate in India’ very aptly summarizes the propetch outlook in India, mentioning ‘As we ride this third-wave of the tectonic shift in the real estate value chain, technology penetration and acceptance of digital enablers such as drones, virtual reality, Internet of Things (IoT), big data, artificial intelligence, block chain and software as a service (SAAS) will take center stage in the mostly organic fabric of the Indian real estate sector, and it would not be wrong to say that the next decade belongs to PropTech.’