4 Main PropTech Verticals

Proptech Vertical

PropTech is a new buzzword. A new property technology is coming and is about to disrupt the real estate and property, construction industry. There are four PropTech verticals, the verticals are Smart Real Estate,Real Estate FinTech; Shared Economy and ConTech: Construction Technology.

Smart Real Estate:

Smart Real Estate refers to technology-based platforms that facilitate the operation and management of real estate assets. Assets could be single property units or entire cities. The platforms may provide information about building or urban centre performance, or they could directly facilitate or control building services. This sector supports real estate asset, property and facilities management.

Smart Real Estate technology can facilitate efficiencies in building maintenance, including the avoidance of unplanned and costly repairs, maintenance of inventory, and optimization of cleaning services. If you knew when critical equipment such as your HVAC system was about to fail, you could reduce unplanned and costly repairs, not to mention avoiding downtime and complaints from tenants. Sensors can measure and report on equipment usage, overheating, or unexpected changes so you can get ahead of problems before they happen. In addition to behind-the-scenes maintenance improvements, smart buildings are also integrating sensors into services that are customer-facing. For example, sensors in supply rooms can let facilities managers know when inventory needs to be stocked. Sensors in office buildings allow cleaning services to be optimized and confirmed. Smart Real Estate technology also incorporates energy management and space utilization.

Smart Real Estate refers to buildings with smart technology implemented inside to allow for a more efficient management of the properties in question. Companies in this sector can incorporate:

  • Buildings with built-in technology and support of technology platforms
  • Smart cities
  • On-site energy supply

The Shared Economy

The Shared Economy refers to technology-based platforms which facilitate the use of real estate assets. The assets can be land or buildings, including offices, shops, storage, housing and other property types. The platforms may simply provide information for prospective users and sellers of space, or they may more directly facilitate or effect rent- or fee-based transactions. This sector supports the real estate occupier markets.

The Shared Economy is a separate industry in its own right, but has been an extremely important part in the real estate sector, with prime examples like Airbnb and HomeAway. Companies in this sector entail:

  • Short term housing rental, co-living and hospitality
  • Shared workspace and co-working

Real Estate FinTech

Real Estate FinTech describes technology-based platforms that facilitate the trading of real estate asset ownership, or enable or aid the processing of real estate transactions. Assets can be buildings, shares or funds, debt or equity; ownership can be freehold or leasehold. The platforms may provide information for prospective buyers and sellers, or they may more directly facilitate or effect transactions of asset ownership or leases with a (negative or positive) capital value. This sector supports the real estate capital markets. The sector has grown to include a variety of different services, that include purely researching and gathering information about real estate all the way to executing real estate transactions.

ConTech: Construction Technology

If technology is a tool used to help solve problems and streamline processes, its application to the practical world of construction is surely a no-brainer. With projects getting ever more complex, there is an increasing need for construction to embrace new tools

In 2016, CB Insights tracked 31 Construction Tech (ConTech) startups. The emerging (ConTech) sector, newer than PropTech, is increasingly a defined area for investment by VC firms such as Brick and Mortar Ventures (San Francisco). Defined by this VC as a sector focussed on the 'built world', involving architects, engineers, construction firms and facilities managers, ConTech bumps into and at the same time underpins PropTech.

The first unicorn in this area, ProCore, and newer firms such as Plangrid, Holobuilder, Micello, Kahua and Rhumbix, focus on data-driven efficiencies across the construction process, such as recording and benchmarking productivity, facilitating the exchange of information between main and sub-contractors, sharing plans and simply replacing paper-based reporting in a huge industry whose IT spend is believed to be below 1% of total costs.
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