Category: Asset Class

StepLadder Affordability
EuropeInterviewsResidential

PropTech Affordability Startup: StepLadder

In a number of cities around the world, housing affordability is getting out of control. Hong Kong, Sydney, Vancouver and Auckland are regularly cited by the IMF as examples where the price-to-income ratio has reached dangerous heights. In my home town, Sydney, the average price is over 12 times earnings (A$84,600 v A$1,032,000) which is causing so much concern it has become a social crisis.

Governments are increasingly being forced to act, enforcing lending restrictions, removing investor tax breaks and looking at ways to increase supply. Now tech entrepreneurs are spotting the opportunity, with a handful of PropTech platforms launching to help first home buyers get into the market. Stepladder is a UK-based one, inspired by the South American system called ROSCAs where people pool their money so they can buy sooner. It’s a simple concept – 10 people each contribute 10% of their overall saving target each month. Each month the group generates 100% of a deposit for one of the people, allowing them to buy immediately. In this way, 9/10 people will get their deposit faster than they would had they been saving alone.

Founder Matthew Addison tells us his story:

While ROSCAs provided the inspiration, what was the moment you decided to create a business?

You’re right to point out that the seed for StepLadder was planted during my Master’s work at the University of Pennsylvania. If you spend time reading my thesis, you can see I was fascinated by ROSCAs, and in particular, the commercial scale opportunity in markets where these are absent.

The rains that helped the seed sprout were a near-continuous flood of press focused on the Generation Rent crisis. In the UK in 1981, 62% of 24-35 year olds owned their own home. Twenty years later, that figure was still 60%. But, by 2014, home ownership in the traditional first time buyer demographic cratered to only 36%.

I thought a disruptive private sector solution – importing a solution to this local problem – could make a difference. We know ROSCAs work – 70 countries worldwide have their own local names for them. I understand economically why they are an equilibrium solution to a particular market dynamic, which is present in the UK first time buyer market. Finally, I have the career-long financial sector expertise, product knowledge, and entrepreneurial sense of mission to bring ROSCAs across the chasm to the UK, and beyond.

What was the process of launching the platform – funding, programming, business planning, etc?

StepLadder’s history to March 2017 can be broken down into three phases: (1) due diligence and formulation; (2) structuring and funding; (3) launch and proof of concept.

First, the formulation of a ‘first time buyer solution’ business model around the core ROSCA intellectual property required understanding the market and testing that the market would be able to understand the StepLadder proposition. Focus groups and due diligence of the first time buyer marketplace were crucial at this stage.

Second, the detailed design of the StepLadder circle was both an iterative exercise based on market feedback and one where expert advice proved invaluable. We closely examined multiple dimensions for assembling the business plan: e.g. regulatory, legal, branding, and underwriting. We also secured the financial support of our ‘Proof of Concept’ investors.

Third, we entered the Proof of Concept stage when the “shop window” that is our site: joinStepLadder.com went live in November 2016. From this point, our focus has been marketing awareness and information exchange with prospective members.

How do you calculate the 45% savings? Presumably some people will get the money sooner, but some might get it later?

Mathematically, the expected draw from a uniform distribution is 50% of the draws remaining. That roughly represents the odds of an individual member being drawn for the property deposit in any given month. It is imperative to appreciate that even being drawn in the final period of the circle is no different to the alternative outcome of saving alone (except for minimal interest in a regulated, principal-guaranteed, high-street savings offering). Where a member in a 30-month StepLadder circle has a 1/30 chance of having to wait the full 2.5years, saving alone that probability is 100% — the lone saver will definitely have to wait that long!

Do you put the money in savings and does the system require the money to earn interest?

The fixed monthly contributions of members become the principal for the peer-to-peer lending underway. In other words, float is minimal. This is not a collective investment scheme, nor does it involve ‘investment returns’. Just the opposite – the power of the ROSCA is in the acceleration of capital formation for actual member use in making an asset purchase.

What is your business model?

We generate revenue from membership fees, mortgage facilitation, and transaction services. We intend for the membership fee to recoup administrative costs of operating the circle – and not as a source of profit for StepLadder.

Please note that the fixed monthly contributions that form the property deposit awards are always treated as client funds and are ring-fenced from StepLadder’s own operating resources.

Do people need to use the agents/advisors that pay you fees?

No, members are not tied to our transaction services partners. However, we believe our service partners will make attractive offers to our members. This is based on two, reinforcing factors: 1) group buying discounts and 2) quality referrals from our membership. We have evidence of this already in the promotions offered to Founder’s Circle members by our initial panel of services partners.

What are your plans for growth / can you take this abroad?

Thanks for the optimism! At the same time, our key focus is executing on delivery of our roll-out: first in Greater London and then throughout London and the UK is an unmatched global opportunity in scale, innovation, and urgency.

Medium-term, we also think there is a significant opportunity throughout the Anglo sphere (Ireland, Canada, Australia, and the US) and beyond. We are open to partnerships in order to accelerate this process.

Are there any other platforms in the UK or globally helping with this affordability issue?

There are a number of well-intentioned government programs aimed at this issue: shared ownership and Help-to-Buy ISAs in the UK, for example. Generally, these come with a number of conditions or restrictions. They are also subject to the vagaries of political priority.

There are also a number of deposit-finance schemes on offer from new and specialist lenders. I note that these can introduce tax, estate, and financing complexity to home ownership, which is not the case with StepLadder.

Ultimately, the real alternative is the Bank of Mom and Dad – but that’s not an option available to every qualified first time buyer. StepLadder is.

What is the technology behind the platform?

The platform has two main pieces (i) the public facing website and matching engine; and (ii) the private member environment with circle management.

The public facing site serves to facilitate the information exchange process and accelerate the match of a prospective member to a circle that fits their circumstances and goals. We have natural network effects as our pool of prospective members grows – this means matches occur faster while simultaneously our circle affinity scores rise. This is always done without sacrificing underwriting standards and why the first criteria remain credit and affordability tests.

In the private member environment, the functionality is focused on managing the circles’ progress, reporting and user-circle interaction. The whole circle management process is automated, including all cash flows and allocation. The UX is a simplified version of a marketplace lender interface, where we prioritise security, transparency, and community among the members of each circle.

Have you needed to jump any regulatory hurdles?

Absolutely. I have engaged with the Financial Conduct Authority since before incorporating StepLadder in March 2016. The first port of call in January 2016 was the FCA’s Innovation Hub. They have been great. Our ongoing dialogue with them culminated in a preliminary perimeter assessment that StepLadder’s business model conformed to Article 36H of the Regulated Activities Order – operating an electronic peer-to-peer platform.

I considered regulatory review so important from the outset that I retained both corporate counsel and regulatory consultancy before raising seed finance or bringing on any team members.

What do you think is the biggest concern someone might have in using the system?

That’s as easy to answer as it is important: trust. We are a new company offering an unfamiliar financial product. Moreover, our proposition is large ticket with a long(-ish) duration. We see ourselves as a path across a generational rift; however, that may sound too good to be true to a casual observer.

So, it’s StepLadder’s responsibility to earn trust. We started by thinking like a prospective member. Focus groups were among the first business activity we undertook, and we clocked-in nearly a dozen before putting up our first landing website. I consider 1:1 direct personal contact with prospective members essential to members deciding StepLadder is a suitable solution. I personally feel compelled to evangelize our message – so, I’m happy to engage with press, partners, and thought leaders about what StepLadder can do.

Singapore PropTech
Asia PacificAsset Class

6 Signs Singapore’s real estate tech scene is on the rise

Singapore’s Property Guru is the dominant portal in this real estate obsessed nation. According to its own statistics, it commands more than 85% of all time spent on local portals and living here I would say that feels about right. The iProperty Group, which Australia’s REA Group acquired late last year for US$534m, can’t seem to make serious inroads with September 2016 traffic reaching 150,000 compared to Property Guru’s 1.5 million (according to www.similarweb.com).

Meanwhile, 99.co, which made waves here when it announced a fresh investment round of $1.6m in January 2015 (largely due to the participation of Facebook co-Founder Eduardo Saverin) promised a superior search experience based on a Google-like search. It has a more modern interface and an algorithm called ListRank which focuses on quality rather than sponsored listings, but the ultimate experience remains more or less the same – consumers are still sorting through listings advertised by Singapore’s 30,000 plus real estate agents.

So how much innovation is there in the Singapore real estate tech scene? Here are the top 6 reasons why things are about to get interesting:

Capitaland VC Fund

In June this year, one of Singapore’s leading property developers, Capitaland, established a SGD$100m fund to invest in real estate related start ups. Named C31 Ventures, $75m is mandated for global investments while $25m is earmarked locally. Of this, $10m was contributed by the National Research Foundation under its Early Stage Venture Fund.

The significance of this move is threefold. First, very few global developers have set aside this type of capital for tech start ups making Capitaland a first mover in this space. Second, as a developer and owner of retail, residential, office and hospitality projects, it will be interested in a very wide range of business models and will be able to provide its investments with access to its property portfolio giving them instant scale. Third, this sends a message to the local start up community which, in turn, should mean more founders moving into this space.

Government

Singapore’s objective to become a smart nation is well known and well on track when you look at examples like Jurong Lakes District, or a range of initiatives relating to public wifi, logistics and driverless cars. Specifically relating to property, the Minister for National Development was recently quoted as saying the industry needs to brace itself for Disruption so there is an awareness even at the highest levels that change is on the horizon.

On top of this, Singapore has declared its intention to become a FinTech hub, with the Monetary Authority of Singapore establishing a FinTech Innovation Hub, creating a regulatory sandbox for FinTech startups and sponsoring the inaugural FinTech Festival on 14 November 2016.

FinTech and parts of PropTech are interlinked. Crowdfunding or peer-2-peer lending for property is relate to both property and finance. Thus, for Singapore to become a leader in FinTech you can expect property related platforms will receive government blessing.

Orange Tee Agent Rankings

In February, Orange Tee, one of the leading residential brokers launched Singapore’s first agent rating platform called Agent Bank. Similar platforms, which operate like tripadvisor for real estate agents, are quickly gaining traction in the US, UK and Australia with Singapore seemingly a year or two behind this trend. In Australia, Westpac (one of the big four banks) recently invested in OpenAgent indicating how much they expect agent ratings to become part and parcel of how people transact residential property.

Online Agents

Online Agents promise to replace human agents, or at least substitute much of their role. For a fixed-fee rather than a commission, they provide professional photos and list them on the major portals and give you all the tools you need to sell your property.

This year both Snappy House and Direct Home have launched in Singapore. On top of that, ohmyhome specifically targets HDB (Housing and Development Board) owners, allowing over 80% of the population to trade their properties directly. While in their infancy, the online agent product has arrived and will undoubtedly appeal to the budget conscious end of market, and this segment will mature quickly in the next 24 months.

Virtual Reality

Virtual reality hit the mainstream when Property Guru launched a pop-up VR showroom at Raffles Place (CBD) earlier this year. This allowed people to walk into their truck and view condo showflats via VR googles and proved that VR can take property mobile.  Earlier this month, another developer Keppel incorporated VR into its show suites when it launched its Highline Residences condominium allowing prospective buyers to experience their apartments using Oculus Rift.

Both the government and property media have now taken notice and are keen to see more of this from developers. Thus, VR will quickly become another weapon in the marketing arsenal, augmenting the traditional show suite launch experience.

Startup Diversity

Most importantly perhaps, the range of real estate related startups is beginning to broaden, moving closer to what’s happening in other markets. In addition to property search, Singapore now has platforms ranging from home design and renovation (Qanvast) to property management (Pegaxis),  property investment research (DREA) to agent bidding (Yotcha), and Internet of Things such as air quality sensors (uHoo).

This diversity will continue to expand, both as the real estate tech scene gains exposure abroad and the local ecosystem matures. Even last week we saw the launch of a smart cities VC accelerator calling for start ups in the areas of VR, IoT, robotics, big data an AI.

Government, capital, talent and industry awareness – the necessary ingredients are coming together and Singapore’s real estate tech scene has begun to simmer.

Homely
Asia PacificInterviewsResidential

Homely: the Australian property portal setting new standards in UX design

Homely is one of our favourite Australian PropTech platforms. It combines property search with neighbourhood guides and agent ratings wrapped up in a beautifully designed, easy to navigate site. Jason Spencer, Co-Founder and CEO, explains why Homely’s success is no accident.

Two brothers in the real estate tech business?

We come from a very entrepreneurial family with a strong history in the Australian mortgage industry. Our family business, called Interstar, was a pioneer that helped introduce the concept of non-bank home loans in the 1990’s. While companies like Aussie, Wizard and RAMS were the retail brands, we were the wholesalers behind the scenes funding the mortgages for thousands of businesses. It was a very successful business, ultimately sold to the Challenger Group. Later we launched several other B2B technology businesses in the financial services space but this all changed for us in 2007 when we had the idea for StreetAdvisor.

What started StreetAdvisor and is still operating?

So StreetAdvisor is a business that actually started with a poor experience that I had with real estate. It dates back to 2007. I had been quite disappointed with our home or more in fact the street, it was noisy, lots of traffic and we really didn’t get along with the neighbours. I’m sure many can relate to disliking their street in some form. So we decided to build a website called StreetAdvisor.com.au that would be like Tripadvisor, but for streets and suburbs.

This quickly took off here in Australia and also in the USA and became the biggest community of its kind where people could talk about what its like to live somewhere. Eventually the community started to ask us to add homes for sale and we built homely.com.au on top of the original StreetAdvisor community launching in early 2014.

Give us a sense of your growth since launch?

We have seen fantastic growth over the first three years, traffic doubling every year and over 90% of all listings submitted nationally. We are on track to have at least 10 million people visit our site in the next 12 months and we have over 90% of all agents signed up to our service. It’s been a lot of hard work to get the business where it is today. We believe no other portal has grown at the rate we have in the first three years.

Why the emphasis on design?

Our design team will tell you it’s not just about design, its also about the user experience. With the maturing of the internet consumers are used to seeing beautiful things often so it often comes down to a sub-conscious level whether something is designed well or not. We want consumers not only to look at homely to see a beautiful real estate search, we also want them to have a well designed experience. When consumers line our search experience up alongside the competition it’s important they can tell and feel the difference. And we think our recent international multiple Webby nominations validate our work.

Why did you move into agent reviews when the main function of the site is property search? Was it monetization and was that always your plan?

We think reviews are a great way for agents to highlight their success, but more importantly consumers want to know as much as they can about who is representing their most important asset. It’s so important to be able to get more than just performance statistics and so late last year we launched our own agent review platform where vendors, buyers and landlords can review their experience.

We also worked with agents to ensure some level of validation of the person who is reviewing the agent. We see the problem with reviews on sites like Google is that anyone can write a review – competitors, trolls, the agent’s mum, you just don’t know and the agent often doesn’t know. So we don’t have anonymous reviews, we ask for the property address and we have a team of people doing moderation.  Reviews for us were never about monetisation, they are about transparency.

How do you think the industry is changing for agents with the growth of homely, openagent and ratemyagent?

Sites like ours and other ratings sites give agents so many ways to better promote themselves online backed up by qualitative content instead of just typical sales data. I know the industry is cautious about agent reviews but we believe with our 10 year experience in the reviews space we can protect the agent while still giving transparency to the consumer.

How ready are agents for the digital age and how prepared are they to pay to enhance their online reputation?

I think the majority are ready for the digital age, they really have no choice if they want to stay competitive. Of course we see some agents who really are too flat out selling homes to bother with online but most acknowledge that with vendors and home buyers doing the research online you need to be there. Providing they can see ongoing value, agents will be happy to continue to pay to promote themselves online.

How do you think homely has impacted the industry – eg. domain.com.au and realestate.com.au?

Homely has definitely pushed the mark in terms of building a beautiful product and we have shown agents that a free-to-list portal can work in Australia, that there there is an alternative to promote your home online. We tend not to think about the competition or what they think, our team is focused on creating something special and unique in the industry.

Have you received external funding or plan to raise it?

No external funding, all privately held.

Finally, any other exciting Australian real estate tech platforms you like? 

No response from me on this one, don’t wish to leave out any number of our current or future partners!

Realla
CommercialEurope

Realla Interview: Commercial Property Search Engine

Residential property portals such as Zoopla, realestate.com.au and Zillow have pioneered the global shift towards the consumption of residential property online. Features we now take for granted, such as map search, professional photos and floor plans, and automated agent contacts are now being supplemented with more sophisticated options like virtual reality tours and automated valuations. This has made buying and renting property online as easy as lying on the sofa with one eye on the TV and another on the tablet.

Commercial real estate, traditionally dominated by the large brokerages, has lagged behind – characterised by individual project marketing (brochures) and an overall lack of transparency. This is starting to change with platforms such as Realla in the UK, taking the best features from residential sites and applying them to commercial real estate. Co-founder, Ian Parry, discusses Europe’s leading commercial property search engine.

What made you focus on commercial property given the background in residential search?

During 2008-2012, I was the CTO and co-founder of Globrix, which was a property search engine 100% focused on the residential sector (it was sold into Zoopla in 2012). During this time it became clear that commercial property was an under served market and there was a great opportunity there. I then met my future business partner Andrew Miles through a UK venture capitalist and we decided to start Realla. Andrew previously worked with British Land on the investment team and had become frustrated with receiving endless, huge marketing brochures for deals. The focus at this time was to create both the search engine portal and marketing tools for agents (since then we have added more powerful features for agents, landlords and investors).

How has your Globrix experienced shaped your approach to Realla?

The approach with Realla has been similar in a sense to the approach with Globrix – both have focused on crawling to create and build a stock of properties in the index. Realla now has over 96,000 commercial properties to search in the UK which is pretty much the entire market. Taking that into account, the technology approach has moved on however the concept is very similar – our most sophisticated tech is using machine learning to extract properties from PDF brochures. We see the opportunity in generating traffic and up-selling paid for placements.

How do you obtain your data?

  • Crawling from public websites
  • Publishing direct through our marketing tools
  • Machine learning for extraction of key meta details such as price, address, building types on both HTML and PDFs

Realla is a great site in terms of managing a lot of data / fields while keeping the UX clean and easy – how as the design process been in order to achieve this?

We have a small product and design team – our head of design previously worked for major brands like Burberry and Nike. We also have a lot of experience with the search components within the site having built a number of “guided search” experiences and learned various lessons via:

  • regular user feedback sessions
  • specific customer sponsors for part of the tools
  • data monitoring to track KPIs and engagement and feed them back into the design

Does the nature of UK commercial property support the need for this type of platform? Ie. so many types of commercial spaces, such a deep and diverse market.

Yes, but it takes investment in the verticals. We think our industrial and office offering will diverge significantly over time. Essentially the base need exists in the market where tenants and investors want to discover deals online and to date this isn’t particularly well served with a single resource to view the entire stock.

Was it an easy process to bring on the commercial agents?

There is no friction in agents using the portal, however it is a slower process for getting agents to use the marketing and CRM tools. We compete against incumbent in-house IT systems and a few other CRM businesses who focus on commercial property. PropTech is forcing agents and landlords to adapt a more digital approach to everything they do now and we are also aware progress takes time, but we have secured flagship clients in the last year.

Clients include Colliers, JLL, Richard Susskind and The Office Group.

What is the most similar platform in the US?

Real Massive is the most similar in the US to Realla, they also provide a powerful and yet easy way to help commercial real estate agents collaborate and streamline their marketing efforts.

How were you funded before this raise in June 2016?

Our first Angel raise was in March 2015.  A list of some of our investors can be found here. Realla is invested in and advised by leading real estate agents, investors and technology angels.

What is the long term vision? Say 5-10 years from now?

We aim to become the industry standard marketing medium for commercial property, and with it, the major specialised portal providing traffic.

Do you have international plans?

Yes, we do have international plans, once we see real growth in the UK we will start to implement them. We already have a foothold in Dubai.

realla

Fintech / Proptech platform LoanDolphin
Asia PacificResidential

Australian Proptech / Fintech Mortgage Platform LoanDolphin: Giving customers more control

The Australian home loan industry is worth more than AUD$1.4 trillion, with the big four banks some of the most profitable in the world. That suggests consumers aren’t always getting the best deal. Meanwhile, Australian entrepreneurs have caught the Fintech bug, with a rapidly developing ecosystem spearheaded by Stone and Chalk. One resident startup, LoanDolphin, has created an auction platform, introducing transparency and competition to the mortgage market. A Proptech / Fintech hybrid, CTO and Co-Founder Rod  Dutra explains their plans to change how Australians get a home loan:

What is the problem you have set out to fix with LoanDolphin?

We both worked for a big 4 bank here in Sydney (Australia) and during this time we were able to experience first-hand the power banks have over the consumers and the amount of savings customers were missing out due to the lack of awareness when it comes to effectively negotiating and finding the right channel to complete their property finance requirements. We saw that customers were at the mercy of banks and had to do a lot of work to get the home loan deal they deserved.

Mortgage brokers can help, but different mortgage brokers have access to different rates so the customer still doesn’t know if they’re getting the best deal. We thought it was about time the consumers had more control and that brokers and banks did the hard work instead so we created LoanDolphin to empower consumers with more choice, convenience and value.

What has been the biggest challenging in launching the platform?

It’s very similar to most startups. Building trust with the customers is probably one of the biggest challenges we have. We collect a considerable amount of information and, as a result, sometimes customers may be reluctant to give all the information out. We are still building our brand from scratch. But this is when early adopters and talking to our existing customers becomes very important. We love it when customers share their feedback with us so we can keep improving our product.

What was the process like in signing up the first bank and generally how have the banks responded?

We were able to sign up some banks early on when we were about to launch our MVP. It takes a lot or persistence and patience with the banks. Generally, banks are very conservative. Different stakeholders, inconclusive priorities and a lack of long term strategic thinking is very hard to tackle as a startup.

When you say lenders and brokers compete is it fully automated and how does that work?

There is a human behind all this competition. We believe that the home loan deal as well as the person who assists you with the application is crucial. Our ratings and reviews will help our customers choose not just the right product but also the most suitable person – whether it’s a bank lender or a mortgage broker. Also, all the bids are placed in an open and transparent platform so brokers and banks can see what everyone else is prepared to offer each customer, which means that the competition is very fierce.

How does a broker compete with a bank when presumably their loan is from the same institutions?

Goes back to what we mentioned about the lack awareness. Certain brokers are categorised as ‘platinum’ or ‘flame’ brokers. These brokers have special deals and certain privileges with certain banks. Likewise some senior bank lenders have anything from pricing discretions to the ability to fast track applications if need be. So as a customer if you go to a normal lender or a normal mortgage broker you might end up with an average deal for one of the biggest purchases in your life.

Do you have any direct competitors?

Our competitors range from comparison websites to DIY broker sites, all with fairly different offerings and value propositions from us.

How has Stone and Chalk helped your business?

It’s been great here at Stone and Chalk and we have found great mentors. The collaborative efforts within the community to help, share and support each other is absolutely priceless.

What do you think of alternative funding platforms like funding.com.au?

We believe that alternative funding platforms will have a part to play in the industry. There are plenty of problems in the market which need innovative solutions to tackle them. As long as no one is ripping the customers off (like the payday lenders saga) and there is a clear value add to the customers, alternative funding platforms will remain relevant.

What is the focus for the next 12 months?

  1. Expanding our team
  2. Release LoanDolphin v2 to the market in the next 8 weeks
  3. Get more direct banks involved

You have announced plans to expand the platform for mortgage brokers. Can you explain how this will work?

We already have mortgage brokers taking part in our platform. We are actively looking to expand our partnerships with Victorian mortgage brokers since we are starting to see a big uplift in our customer base from Victoria.

Comfy
CommercialInterviewsIoTUnited States

Comfy App: Leading the Way in Workplace Comfort and Productivity

Comfy allows office workers to control their immediate room temperature via their phone, and is leading the workplace technology wave, as employers increasingly focus on the connection between environmental quality and worker productivity. In June, Comfy raised US$12m in Series B funding from leading investors including CBRE, a global real estate brokerage. President Lindsay Baker gave us a snapshot of the market leader in office thermal comfort:

How did Comfy come about and how did you get involved?

Comfy started a handful of years ago when Andrew and Steve, our CEO and CTO, were PhD students in Computer Science at UC Berkeley. They were involved in a research project around software and buildings, and created the prototype of Comfy after tinkering with systems at a building on campus. It worked pretty well, so they started navigating the idea of starting a business. That’s when I met them, we got the company off the ground around 3 years ago, and we’ve been growing ever since!

Emergence, Microsoft and CBRE are an amazing set of investors / partners – what was the capital raise process like?

We are very fortunate with our newest investors. They all share the vision for the impact we can have on people’s lives, and share in the excitement that we have at being in the right place at the right time for the market. Emergence is well known for investing in successful SaaS companies like Salesforce, Box and Yammer, and have been really helpful so far as we learn some key lessons for our upcoming growth stages. Microsoft is obviously a legend when it comes to positively impacting productivity for us in our work lives, and so they’ve been great as new partners. And finally the investment from CBRE has lent a great credibility to us, given their status in global real estate. They look at a lot of real estate technologies, so we are very happy to earn their attention. The capital raise process is a lot like building a new account or partner – it’s all about finding shared value, so it’s exciting to find it with such great organisations.

I’ve read about the investment being for further product development / expansion, could you elaborate?

We as a company are in a great place in the market. We’ve shown our unique ability to get high engagement from occupants with a CRE app that also does some pretty tricky work with systems integration, controls etc. So now we are looking to some great opportunities to use our platform and skills to eliminate other pain points that occupants have with their physical environments at work. There’s a lot to be done, but the good news is that the real estate industry is looking for ways to improve worker productivity and we have a unique ability to help do that. Stay tuned for the details 😉

Is the investment from CBRE any different given they are one of the world’s largest building managers?

As has been reported, we are currently piloting Comfy with CBRE in a set of locations. We’ve all seen press releases about startups and big companies in our space promising big future partnerships, but we’d rather make headlines once we’ve made it happen, so I’ll leave it at that for now.

Comfy looks like a tenant focused product. Is there a way to work with developers / landlords?

Comfy is a product focused on anyone who cares about how it feels to go to work every day. Typically that’s been employers who have control over their buildings, because they see the impact of employees who aren’t as productive as they can be. But all of us in real estate bear some of this responsibility, it’s just a question of monetizing that. So yes, we do now have some awesome clients who are landlords who see Comfy as a differentiator – a way to attract and retain tenants. But I’ve been in the real estate industry long enough to know that this type of thing wouldn’t have initially gotten traction with landlords because they needed to see the pull from tenants. So we went first to owner/occupiers, and now that we’ve proven our value, we are excited to be getting the attention of landlords.

Are you guys working on the Delos Well Rating in any way or seeing it influence what you do?

I’ve known the folks at Delos since they got started, and some of the work that I was doing before Comfy (along with many others) was influential to them in starting the system. The connection between health and buildings has been a long-standing pursuit, and Delos is doing great work driving this message into the marketplace and supporting some awesome research to prove this connection. I’ve not had time to work directly on the standard recently, but we are definitely supporters in their work.

In terms of integration with other platforms (Redwood Systems, Intel, Lutron, and View) – are there any more planned?

There are indeed other integrations planned, but none announced yet!

Can you tell me more about the AI and how it works?

To clarify, Comfy delivers streams of warm or cool air to building occupants at the press of a button in the app. Over time, those requests are run through machine learning algorithms to help predict and optimize the temperature for a particular zone (or area where people sit). Basically we use an equation that runs over and over again, for every HVAC zone that we support, and the output of that equation determines the maximum and minimum temperatures in that moment for that zone. So it’s dynamic over time, in other words.

User data accumulates over time, and that equation keeps running, and thus the computer can gradually migrate to settings that it ‘learns’ over time. That equation is also called an algorithm. Our algorithm takes into account a few numbers: the time of the week, the indoor temperature, and whether someone wants it to be warmer or cooler. Then it crunches all of the data points for those numbers, and cranks out its guess for what the perfect temperature is, for that room, at that time. The great part is also that if the algorithm doesn’t nail it, people have an easy way to get an immediate change as well.

As I am sitting in Singapore, what are the plans for international expansion?

We are excited to be getting interest in Comfy from across the globe. We are happy to support clients in 4 different countries today and we are considering international markets to potentially establish more of a presence proactively, but either way, the great part of what we do is that it’s very feasible to deploy and support remotely, so we’ll keep doing that for now!

What’s the vision of Comfy in 10 years?

Today, there is a big disconnect between what our bodies and minds need to be productive and what our office buildings provide. We believe that people can reconnect with buildings so that our workplaces become truly thoughtful and responsive to us. There are many facets of that re-connection, lots of work to do.

My favourite image is that someone walks into their office, maybe a location they don’t usually visit, and the building knows this person’s preferences, maybe it’s a quiet, naturally lit, cool spot, and they get a little notification that tells them that a perfect spot is available for them to sit that day, and asks if they would like to book it for the day. Then it helps them navigate there, gets their documents pulled up on the workstation, and they can settle in comfortably and seamlessly. When they need a little less light, they can easily dim the windows without hassle. When they need a nearby room for a meeting, it’s easy to book, find and set up. All of these interactions should be as easy and as masterful as making a sandwich in your kitchen, but today they are filled with frustration. Maybe not the craziest vision, but it would help a lot of people have better lives at work.

Finally, Is your office air conditioning utopia?

Ha, well, our current office is a lovely space in beautiful downtown Oakland. We do have Comfy in our space. If it’s a utopia, I’d say that’s more because we have an awesome team of people who I’m proud to work with. And of course we also keep ice cream and sweaters on hand, just in case 😉

See Comfy in action on youtube.

Proptech Oppsites
CommercialInterviewsInvestmentUnited States

Oppsites: Proptech Matchmaking service for Real Estate Developers and Cities

Cities need developers, developers need cities. Connecting the dots between government planning objectives and investment has previously been conducted via a mixed bag of personal relationships, brokers, official tours and plain old business development – until now. Oakland based Oppsites saw an opportunity to create a single platform allowing cities to promote all of their development opportunities, centralising and simplifying this process for all parties (video explanation here). COO and Co-Founder Tomas Janusas explains the background and how it works:

So what is the background behind OppSites?

After 15 years as an urban design consultant helping cities achieve their economic development goals, Ian Ross (our CEO) realised that cities needed a better way to communicate those goals with investors, developers, and brokers.

Many communities include a large number of public and privately owned properties that are underutilised, and whose redevelopment would bring new revenues to the community. Yet many cities lack the resources and professional network to market those opportunity sites to a wide audience of prospective investors. OppSites was built to connect cities and the real estate investment community to maximise successful economic development through enhanced communication between the government and real estate sectors.

Tell us about the team?

Ian Ross (CEO and Co-Founder): Since 1999, Ian has provided urban design and economic development services to cities in support of long term economic health. He received a BA in economics from the University of Rochester and an MLA from Cornell University. His experience informs his focus on economic development at the intersection of city planning and real estate investment.

Tomas Janusas (COO and Co-Founder): Tomas has a diverse background in real estate, planning, technology, and project management. OppSites grew out of Tomas’ passion for building technology solutions that catalyse urban development. Tomas is in charge of OppSites’ daily operations and product development. His lifelong appreciation for urban environments led him to the University of California School of Environmental Design (CED), where he graduated summa cum laude with a BA in Urban Studies.

What drives local government to list opportunities? Why can’t they find partners the traditional way?

When cities do planning work and create a vision for their future, they raise the economic potential in a property by increasing the development capacity. But that potential often goes unrealised because investors and developers simply do not know about it. By posting these properties on OppSites, local governments can reach a much wider audience than traditional methods such as word of mouth, city-hosted broker tours or industry conferences.

Does this replace the role of traditional brokers (CBRE, JLL etc)?

OppSites does not replace the role of traditional brokers, but rather exposes more opportunity for the industry to act on. We believe that real estate potential often goes unrealised simply because property is not listed for sale. OppSites uncovers entirely new set of real estate listings – properties that are not on the market but have underutilised potential and local government support for new development.

Does the municipality etc simply list the opportunity? Does oppsites provide any additional analysis or just act as a marketplace?

Currently OppSites provides only basic layers of information (parcel and owner’s information) and no analysis. Local government leaders can highlight opportunity sites or districts on the map and share local knowledge about an investment.

For example, the city of Oakland is using OppSites by posting some of its recently completed specific and area plans. The plans detail how land can be used in certain areas. It allows Oakland ‘to educate, market, and demonstrate the city’s efforts in terms of showing off our opportunity sites and creating interest for those sites,’ says Aliza Gallo, the city’s economic development manager.

How do the partnerships work: ICSC, ULI etc?

Public and private sector members can use OppSites technology to share or find the information about investment opportunities among their members.

  • Cities, Counties, and Economic Development Organisations can showcase publicly and privately owned properties that they want to see redeveloped, even if those sites are not listed for sale. Those sites are showcased on a web-based platform, and can be shared with local and national real estate professionals.
  • Real estate Developers, Brokers, and Investors can find underexposed development opportunities that support local economic development goals, then connect with city leaders to save time, streamline due diligence, and reduce risk.

‘We see this as a tool that will be helpful to our members both in the public sector and the private sector in promoting and finding sites,’ says Cynthia Stewart, the Washington D.C. based staff vice president of community development for ICSC, a global trade association for the retail industry. Its members include shopping center owners and developers, land use attorneys, architects, mayors, and chambers of commerce. ‘It’s a real way for small-town cities and urban cities with underserved urban markets to get those sites in front of developers. They aren’t always the obvious sites,” Stewart says.

What is your coverage like in the US? What has the expansion process been like?

OppSites has grown incredibly fast since it’s launch in September 2014. Currently, we have over 400 cities and over 3,000 real estate professionals using OppSites on any given month.

What have you learned or surprised you since launching this business?

The most surprising factor has been, and still is, the inefficiencies that exist in real estate industry and the potential it creates for commercial real estate innovators.

Could this platform expand internationally?

It could, but we have not explored the opportunity thoroughly. Currently we are working with a few Canadian cities. However, I believe OppSites has an incredible potential in the area of Foreign Direct Investment.

You had a seed round in 2014 – are you now revenue generating with no need or plans to raise further capital?

We are currently raising more capital to accelerate the growth.  

Have you seen Landinsight in the UK? How similar is it to your platform?

OppSites is a matchmaking service for cities and real estate developers rather than the property analytics tool as Landinsight seems to be.

Commercial property online agent
CommercialEuropeInterviews

Virtual Commercial: the world’s first online commercial property broker

The digital disruption facing the real estate industry has taken another step forward with the launch of what could be the world’s first commercial property online agent. Following in the footsteps of UK startups such as Purplebricks and eMoov, Virtual Commercial provides commercial property vendors with all the tools they need to sell online for as little as £300. Co-Founder and CEO, Andrew Vertes, tells us more:

Are you the world’s first online commercial agent? 

Yes, we believe Virtual Commercial is definitely the UK’s first, if not the world’s first, dedicated online commercial estate agent. We provide the tools and support of a traditional agent to allow anyone to sell or let their commercial property throughout England & Wales. All for a low, fixed cost with no commission fee charged.

Was this inspired by residential online agents?

Absolutely. Having worked in commercial property agency for many years, I had witnessed the way the internet was changing how commercial property was being marketed and searched for. At the same time, the rapid success of online residential agencies (eg. Yopa) proved that sellers are happy to take control of the process.

What type of properties do you target? Is it everything from the local grocery store to a large office building?

As this has been built from the ground up for commercial property, we are able to handle any type of commercial property or business disposal. Whether a sale or a letting and from your local high street shop through to a large multi-let office building, we can deal with every use and every type of disposal.

What do the traditional agents think of this?

As we are the first movers in this market, we believe we will be closely watched. Having met some senior individuals within the established traditional firms, the consensus is that they have been waiting for someone to make the move into this market and are surprised it has taken so long.

What is the background of you and the team?

I have worked in commercial property my whole life. I ran the commercial agency department and was a director of a successful central London property company. I then left and set up my own management and agency consultancy, then came up with this idea and realised I had to make it happen.

Andrew Vertes

Andrew Vertes, CEO and Co-Founder, Virtual Commercial

I spoke with a good friend Laurence Herzberg who had recently helped launch a property portal in the Balearic Islands to see what would be required to make this happen. He introduced me to our third co-founder Aron Maus, who also had experience with launching his own start up trading in precious metals.

What are the biggest challenges in growing the business?

We launched at the beginning of June, about the same time as Brexit. Without a doubt this has affected market confidence. We initially launched with a single sales model based on a 12 month term but we found prospective clients now have the concern of negativity surrounding commercial and the future. Understandably clients had concerns about paying for a fixed marketing term if the economy is about to plunge into a recession (although that has largely been seen to be unfounded). We have dealt with this by changing and improving our pricing options to include the following:

1. Unlimited marketing term
2. On-completion pack
3. 3 month marketing term

Do you have outside investment or are you planning to raise capital?

Yes, we were fortunate enough to raise investment for the business. I think our successful raise was really down to our team of co-founders, having a detailed business plan, financial forecasting and a working product. Because we believed in the concept we decided to self-fund the development of the platform prior to raising capital. This meant that investors could use our platform and see for themselves what we were building. We ended up getting investment from multiple investors at our target valuation. However, it was by no means easy.

What has the market response been like generally? Any surprises or as expected?

As mentioned, launching in the Brexit aftermath has been an unforeseen and surprising challenge. We initially launched with a flurry of enquiries from interested users, however, post Brexit, many previously interested parties are now questioning whether it is the right time to sell. Those users who have completed a purchase have been really positive about our website, support and the lead management process.

Do you think this is different in any way to the residential concept? (eg. vendors may see agents are more valuable for commercial assets?)

There are obviously similarities between the two but there are also significant differences and far more complications and challenges with commercial property, whether using a traditional estate agent or an on-line agent. However this is why we offer Agent Support for all our clients, should they have a question or need advice, we are here to help.

Can you give a case study of a property sold via the platform?

We have only been active a short while but one of our first clients is a critically acclaimed and award winning restaurant in a beautiful medieval town in Dunster, Somerset. The restaurant is Reeves Restaurant, the freehold sale of which includes a 40 cover restaurant, outside space and accommodation. The current owner had previously used a traditional estate agent to market the property but he found that the agent actually had very little involvement in the sale beyond listing the property on-line and interested parties preferred dealing directly with him rather than the agent. However, the agent still insisted on a traditionally large commission fee based on the sale value! As a result, he engaged Virtual Commercial to assist in the sale of his asset.

Workplace Engagement Platform
CommercialEuropeInterviews

Office App: Workplace Engagement Platform co-founder Interview

As a successful graduate of Pilabs 3rd cohort (2016), UK startup Office App represents a new wave of workplace engagement platforms. Businesses large and small are exploring opportunities to engage employees, improve productivity and maximise staff satisfaction. Book a meeting room, receive local lunch specials or check if there are parking spots for your clients all via a single, flexible mobile app. Office App co-founder Thijs van der Burgt tells us more:

Tell me a bit about the team and why you decided to start Office App?

Office App is built from the belief that an office building can and should be more exciting, efficient and above all more fun. That is why we’ve created the only fully integrated office assistant for your mobile. The team includes:

  • Thijs: 7 years experience in Product Development with a focus on User Excellence
  • Teun: 5 years Strategy Consultancy at McKinsey  with a focus on Operational Excellence

Did you know much about workplaces / office buildings beforehand?

Although I have worked in office spaces, I didn’t actually know much about the spaces themselves. I’m a product developer, my partner has over 14 years of experience in real estate, and together we developed a product that is both helpful for facility managers and occupants.

What are you hoping to get out of the PiLabs experience?

When we started the business in Amsterdam, we knew we could build a successful business in our home market, but that it is not where the big opportunities lie. The European pinnacle of office life is the City in London, so in our process of researching that market and looking for ways in, we more or less stumbled upon PiLabs. At that point we had already realised we were going to need to step up our game if we were successfully going to penetrate the UK market. PiLabs is very well positioned to do so by helping us to get in front of the right people, sharpen our product offering and secure funding.

How much traction have you got with clients?

We are very excited to announce that we have on-boarded major clients like Dell, EY and the World Trade Center. All our clients are very happy with our added value and have either applied Office App in more offices since then or recommended us to other clients.

How do you on-board local deals? (ie. from local restaurants etc)? Is that a manual process?

Yes, it is a manual process. We are able to add a mobile shop for your local dry cleaner, car wash or florist. We offer these local retailers a shop in our marketplace within 1 hour, direct payment included.

Could you expand overseas? Eg. Singapore?

Yes, definitely. We have optimised our platform to scale easily and reliably – we don’t even have to be physically present to install Office App at any office around the world!

You’ve mentioned being sensor/IoT agnostic – can you tell us about any sensors you are already working with?

With our partners we are using PIR, vibration, temperature and magnetic sensors in different buildings. Mostly for parking, desk, meeting room availability and their occupancy rates. And with other partners we use wifi or beacon sensors. It depends on the clients wishes what technology we implement and how we offer this to the employee. For example, for one client we have sensors in table tennis and foosball tables to indicate if they are available.

What are your plans for raising capital?

We are looking for £500k investment for operations, sales and product development. Our growth is limited by the bandwidth of the company, not the interest from potential clients.

Are you planning to grow the team?

Yes we are hiring new sales people and looking for an additional iOS developer to strengthen our development team.

What has been the best part of the experience overall?

A big part of my job at Office App is that I’m in charge of product. In development, we focus on user experience and iterate on results in user engagement surveys. Seeing people more engaged and happy using Office App makes me proud of what I do.

DREA Singapore
Asia PacificInterviewsResidential

Interview: Digital Real Estate Assistant (DREA) Singapore

Singapore’s DREA aims to radically improve the property buying process giving buyers access to market data analysis and insights previously limited to professionals, while giving agents highly targeted leads and a platform for digital marketing. A husband and wife team (seemingly the perfect combination with one an ex-banker, the other the CTO), we sat down with the later, Yuet Whey, to discover more:

What is the story behind DREA? Was it a lightbulb moment or a slow burn idea?

The idea for DREA started 3 years ago when I was looking to buy my first home in Singapore and was actively seeking information on the real estate market. I wanted a way to search for homes that would give me a minimum of 3% rental yield. However, it would require crunching through thousands of data points on Excel, a daunting task to many

Even as I shortlisted homes, I realized that there was an information gap in the market for real estate insights and more importantly, insights that could be accessed easily on-the-go. I then set about to create the first ever Digital Real Estate Assistant (hence the name DREA) that would offer any daily buyer, tenant, seller and landlord access to high quality, instant real estate information that is at the same time, easy to understand.

Tell me about the process of building the site (ie. first while working on it on the side, then to moving full time)?

When my partner and I first started designing and building DREA, we focused primarily on the consumer lens. Each time we had a house viewing or visited a show flat, we would think about what we would like to have as buyers and tenants. We then proceeded to create them. Being in the shoes of a consumer allowed us to identify gaps in the market and more importantly things that matter to the consumers. For example, the ability to search homes by drive time and the ability to get instant property insights such as supply risk and pricing around an area.

The product development process was exhilarating. We were essentially imagining possibilities, and then making them come to life. We took time to build up a truly differentiated and proprietary data set that went beyond common real estate data like prices. We also spent time talking to others and getting their inputs. More importantly, we took time to properly understand the industry to refine our business model. That is how we concluded on the need to shift away from the already commoditized market for posting online real estate classified listings.

I left Investment Banking when I knew we were ready to hit the market. Running a company is an entirely different experience from Banking. There was no one to tell me what to do. I had to learn new skills, set goals and be disciplined.

You are a husband and wife team – how does that work?

We complement each other by leveraging on each other’s strengths. It is not always easy and we recognize how critical it is to maintain clear boundaries between work and home. We constantly remind ourselves that the objective of working together is to build towards a common goal and (simple as it sounds) be happy. The focus on a long-term shared goal helps us look beyond individual moments of conflict which are unavoidable.

What are the key features your site offers in terms of market research?

  1. Location-based insights: anyone can flip out their phone anytime and instantly discover suitable units nearby, show flats nearby, prices in the area, supply risk and more.
  2. Natural Language Search: redesigning how one searches for information or homes by streamlining a wide range of search parameters into a simple and intuitive user experience. For example, try searching for price trends in District 9 or find me a 3 Bedroom for sale under $1.2m with a yield of >2.5%
  3. Price Trends and Supply Risk: ability to instantly retrieve detailed district-level price trends and triangulate it against upcoming supply in each district.
  4. Forward-looking SIBOR Rates: we offer consumers the ability to discover where SIBOR rates will be in 3 months time based on market expectations.
  5. Comparable Condos: DREA is designed to help consumers identify truly comparable condos (beyond area) in terms of tenure, age, price, drive time to your office or even walk time to MRT.

Where does your data come from?

We pull together data and content (housing, demographics, transport, interest rates) from multiple avenues including DREA’s proprietary dataset and from public sources like Urban Redevelopment Authority into a single source to enable new forms of instant analysis and insights on the property market.

What features do you offer to agents?

  1. For agents, we offer the ability to select, target and actively reach out to potential home buyers or tenants based on their housing preference. This is a 180-degree shift from the “post listings and wait for leads” business model adopted by most real estate portals.
  2. In addition to that, we offer agents a full suite of information and analysis so that they can address every client ask. In the past, an agent may need to spend hours pulling data from URA and then analysing them just to find out something as simple as future supply in a given area. Today, DREA processes all this and presents this to an agent in a matter of seconds. In a market where there are more than 20,000 agents, the ability to provide fact-based answers at the snap of a finger is a tremendous competitive advantage for agents.

How do you compare to property portals like property guru / iproperty?

We have a different business model and revenue model. For DREA, our content and information tools drive traffic. DREA is not about listings and we do not have to first build a large inventory of listings before we can attract users to our site. Users come to DREA mainly to assess whether a property is in a good location, has good amenities nearby or whether it is appropriately priced.

Similarly, DREA monetizes subscription to content services and for the purchase of detailed property insights reports. For us, listings are free and forever will be. We are currently testing other products which are unique to DREA and will be rolling them out to the market soon

What stage are you at in terms of funding / revenue / growth?

We are currently in the middle of discussions with several Series A investors and we are already revenue generating thus far.

What is the long term ambition (5-10 years)?

We envision a future where every consumer walking into a show flat or house viewing will look to DREA for information. And that they will use DREA to differentiate facts from sales-pitch, ask educated questions and use it to negotiate effectively.

On the commercial front, we see ourselves being a global player who has materially accelerated the shift in real estate advertising spend from traditional to digital. Our goal is to be a sustainable and profitable business.

What’s the hardest thing about being a startup in Singapore?

Competition for talent. We compete against MNCs, SMEs, larger tech companies and other startups for talent. With the lean business model most startups have, it has become increasingly difficult to attract the talent startups require to scale quickly and efficiently.