Hi network, let’s talk about proptech. The innovation speed of prop-tech is a bit slow. For example, the fact that we still use the term “proptech” is like using the term “mobile telephone.” But the expectation is that proptech will eventually become so embedded in the real estate culture and processes that it won’t even be necessary for us to use this term anymore. Now, it is still not a given that a building can be planned, leased, or managed without tech.
Post pandemic growth
Because of Covid-19, the real estate industry finally embraced digital transformation as we witnessed their PropTech movement. Now innovative companies are trying to speed up to satisfy the already digitally savvy users. To be specific, when it comes to millennials, more than 80% want a 3-D tour or digital floor plan when they search for a home. And for GenZ, online leasing is a must, and they expect a tech-centered concierge as standard service. On the other hand, the problems prop-tech is solving right now are very real. Commercial real estate has no shortage of problems to solve. Anyone who’s worked a few years within the industry quickly realizes how tasks could be done better with technology. Innovative startups find and solve those problems.
The real estate business without innovation is already a moneymaker
Startups must focus on solving problems that make already profitable sub-categories of real estate even bigger and more efficient. The innovations don’t need to make a customer ten times better in commercial real estate; they need to be good enough to give their customers a little nudge to increase engagement and resolve commonly-known barriers. That’s a much smaller hurdle to overcome than startups in other sectors that need to replace a large incumbent.
Proptech trends
That is why trends show that private investments in this sector will grow. When you compare the number between 2021 and 2020, you can see an increase of 28% in money raised, and more VC-backed companies in the real estate industry group were acquired than in the previous five years. And there are so many fields to innovate within proptech: virtual tours, A.I., fintech, access to data, digital contracting, the metaverse, sustainability, and more. Even though proptech still seems young and somehow destructured, the times when innovation took years to be fundamentally adopted by markets and societies are gone. Everything happens fast and in a digital-native manner. Adopting and following new tech trends is no longer an option but a necessity.
