Business ideas: Property tech
With increased support and a growing market, proptech is set to open up a host of opportunities for innovative, property-focused start-ups in 2015…
After naming property development as one of our business opportunities in 2014, 2015 sees another lucrative business proposition in the property space but in a rather different form – property tech.
Amidst rumours that the housing market bubble might be about to burst, in contrast, property tech is growing rapidly, with ‘proptech’ the latest emerging technology sector among more well-known industries such as adtech, fintech and healthtech.
With cloud technology simplifying so many elements of our day-to-day lives, property tech combines the latest technology with the rather outdated property industry to eliminate many of the traditional headaches associated with the sector. From finding and renting property to property management and even investment – there are plenty of opportunities for start-ups to take a slice of this new property pie…
Property tech: Why it’s a good business idea
The property tech sector is really starting to hot up – with a number of high-profile announcements taking place in the last few months.
Property tech pioneer Zoopla, a website covering the residential property market, joined a select group of tech giants with its $1.56bn valuation after floating on the stock market mid-last year and easyJet founder Stelios Haji-Ioannou entered the online property market with new venture easyProperty, securing £1.42m in an oversubscribed crowdfunding round – which valued the business at a whopping $66m.
And the space is not just for established players. One of a number of burgeoning start-ups looking to challenge the traditional estate agency model, Purplebricks.com’s simple online platform secured £7m from high-profile backers for its 24/7 estate agency that operates at the fraction of the cost of the high street after launching in April 2014 – and it seems there’s certainly a demand for businesses that disrupt the traditional agency model.
While launching a full-blown property platform may not be a feasible opportunity for everyone, property tech is massively opening up the industry in general – meaning there are a number of innovative avenues you could explore. Virtual View App allows users access to 3D property models and floorplans and there’s potential to look at other elements of the property process such as unique videos to market properties or cloud services that manage rental-related documentation.
With the addition of specific property tech support, Europe’s first property tech accelerator Pi Labs launched in late 2014, it seems there’s never been a better time to launch a property tech enterprise.
Property tech business opportunities
The majority of recently launched property tech start-ups seem to fall into two distinct categories. Firstly, property management platforms that disrupt the traditional estate agency model from online estate agencies such as Purplebricks and property guru Sarah Beeney’s Tepilo to platforms such as Be Street Smart and Movebubble, that claim to remove the need for a middleman completely – connecting renters and trusted property owners directly.
The space is quite quickly becoming crowded but if you can find an angle or niche there is clearly a demand from users for lower-cost, hassle-free services that take the stress out of renting and buying.
Second is a twist on property development that capitalises on the increasing shift to alternative lending. Platforms such as Property Partner (which launched this week) and Crowdlords (which is still in beta) offer property investment via their platforms using equity crowdfunding and with Nesta citing that the alternative finance market grew to £1.74bn in 2014, innovation here still seems a promising bet.
Alongside these platforms, there’s also the opportunity to use technology to more generally disrupt the “property of our world”, as Pi Labs calls it, from businesses focused around smart buildings to architectural and design innovation or big data solutions.
The key here is innovation. Unlike some industries, property is still fairly untouched when it comes to technology advancements – now’s the time to change that.
Who else has started a property tech business?
Alongside Property Partner and Crowdlords, Property Moose offers users hassle-free property investment, from just a few hundred pounds. Since launching last year, the site has over 2,000 registered investors and has channeled funds of £300,000 to-date. Enabling everyday investors the chance to build a portfolio and property investors hassle free tools to extend their portfolio, the site’s sophisticated tech also offers unrivalled information on investments, including instant valuations, rental reviews and diversification reports.
In the ‘hassle-free’ space, Locatable claims to make “managing your home a breeze”. The innovative site is building a toolkit to make shared living easier and its inaugural product Splittable tackles the often tricky subject of bills. Claiming to stop arguments before they start, the app makes it simple to split bills flexibly while helping users keep track of houseshare expenses. Still in the early testing stages, any start-up that can make houseshares easier will undoubtedly have mass appeal.
Nicholas Katz, founder of Locatable, explains why proptech is going to take the global stage in 2015:
“In a recent article from TechCrunch regarding venture investment in the space, RRE Ventures’ Steve Schlafman says, ‘Real estate is a super attractive industry to be building tech in, it drives a huge part of the economy, and it’s generally antiquated.’
“Start-ups are offering a variety of solutions in real estate to help tackle problems ranging from commercial leasing, to residential property finding, to conveyancing automation and beyond. At our company, we’ve launched Splittable to help tackle an underserved and often overlooked market; renters in shared accommodation.
“If you’re looking to launch a start-up and looking for something interesting that’s scalable… I’d suggest thinking through the problems you’ve faced in the property market in the UK and imagine you’ll come up with quite a few. Live in a property? Work in an office, restaurant or hotel? Ever had a problem related to your property? I’d be willing to bet that your answer to all of those questions is yes.
“Your home is your largest financial asset. You work 8+ hours a day in a building – unless you’re lucky enough to be a park ranger. You spend over 80% of your life inside buildings. Build something that solves problems you’ve experienced with property and I guarantee that you’ll find scalable opportunities as there will be others who’ll have had the same problem, and will either become your next users or investors.”
Ben Lloyd, director of growth at property crowdfunding platform Property Moose, points to changes in the property industry and fewer barriers to entry:
“It’s clear that technology is slowly revolutionising the ways in which we invest in and manage property. From giants like Zoopla and Rightmove, to burgeoning crowdfunding platforms, the ways in which we interact with the property industry has changed.
“It is key for the industry to continually improve visibility and transparency, and to work hard to empower home-buyers and investors.
“The combination of new technology along with access to data means that there are emerging products to suit everybody. Tech is overcoming the barriers that usually make access to the property market difficult. Some crowdfunding platforms allow people to become investors with £500 or less. This would have been impossible a few years ago.
“For a country obsessed with the property market, these changes provide exciting propositions, that I suspect will be embraced by more and more people over 2015 and beyond.”