The Rise of PropTech: What is it and Why Does it Matter?
Ironically, the youngest vertical of the technology industry is growing rapidly to serve one of the oldest industries: real estate.
Much like FinTech has transformed the financial sector, PropTech (or CREtech for Commercial Real Estate) is the technology that is being used to transform the way we think about and use property. Andrew Braum describes it as “a movement driving a mentality change within the real estate industry and its consumers regarding technology driven innovation in the data assembly, transacting, and design of buildings and cities”.
What are PropTech startups focused on? Why are they needed?
This question may seem obvious (because, honestly, who needs a realtor anymore?)* but I assure you that we are only scratching the surface of the potential of this tech vertical.
*note: I’m being facetious, the brokers I work with are invaluable and some of the smartest people in the industry. Technology empowers, not replaces them.
As a property developer, here is a short list of the inefficiencies I face daily:
The list goes on and on… the point being that there are a lot of difficulties translating such a physical (and old school) world into the digital realm.
Where do we draw the line between PropTech, Fintech, and other tech startups?
The truth is, there’s a lot of grey area. Who’s to say your building’s Facebook page doesn’t count it as PropTech?
A fun Venn-style infographic shows one idea for the spatial relationship of the industry:
Platforms in PropTech vary as widely as the property industry itself. Major players have been noted disrupting many areas. Some that I’ve been paying attention to are below (but not limited to, honestly there’s thousands):
Where is all the money coming from?
Global investment in PropTech companies grew 63% from 2016 to a staggering $12 billion in 2017. Why so much attention in this vertical?
Historically, the real estate industry has been the hardest to disrupt. Just look at the life cycle of Redfin, a company that set out to change real estate listings, and ended up conforming to the status quo of the business.
