The digital transformation has been progressing for years in almost all industries. AdTech, BioTech, FinTech and many other related neologisms are no longer unknown. The real estate industry has remained unaffected by digitalization for a long time, but now, this industry is also in the midst of change and has seen a significant number of new start-ups, the so-called PropTechs, in recent years.
This term covers Property/ -Services and Technology.
Partial- and intersections
Part of the PropTechs are in turn ConTechs (Construction Technology), that focus on the construction process itself.
PropTechs are also often closely related to mobility issues such as smart parking or charging spots when addressing the issue of the “city of the future”, or to FinTech (technologies in the financial sector), for example in relation to loans or mortgages. CleanTech plays a major role, as the real estate sector is one of the largest consumers of energy and therefore especially the topic of energy efficiency is of great importance.
Startups are younger than 10 years and are characterised by their (highly) innovative technology or business model. They strive for a rapid growth in employees or turnover and must not be ignored by traditional companies due to their increasing relevance. Complementary skills can lead to successful collaborative innovation. False expectations have to be avoided and challenges such as a different way of working resulting from different organizational structures must be managed.
In order to work more ambidextrously and to participate in new markets and technologies alongside the core business, a classic cooperation as a customer or sales partner of the start-up company can be established. Thereby a win-win situation should always be pursued.
The graphic shows the development stages of a start-up cooperation. Ambivation supports and moderates this process in order to set up the right setup and pursue real, sustainable strategies.
Ambivation created this guide to share knowledge about the PropTech market in order to enable interested parties a quick start into the PropTech start-up market. Ambivation supports some companies in the real estate and construction industry in their cooperation with startups. For example with the Startup Monitoring or with the development of the cooperation strategy for a sustainable successful cooperation
Even though start-up investments in Germany may be low by international comparison, investors are one of the most important drivers of changing to a digital real estate and construction industry. After the real estate sector remained untouched for a comparatively long time, a real hype can be seen, especially in the last two years.
With PROPTECH1, the first German VC focusing exclusively on start-ups in the property sector was launched at the end of 2017. In addition to financial support, the young entrepreneurs are given the opportunity to work with important partners from the industry. Several players in the real estate industry have integrated investing in innovative start-ups into their strategies:
|Location||Berlin HQ +4||Cologne||Munich||Cologne||London +1||Munich|
|Initiator||Cooperativa Group||Art Invest, K. Panitzki||u.a. Büschl Gruppe||Bauwens (CVC)||R. Schöfer, A. Lorenz, T. Huzarski||M7 Real Estate, Conan Lauterpacht|
|Startups||Inpera, Architrave||ShareDnC, Inreal||Aprao, Proda||Homelike, spaceOS||PlanRadar, housfy||IPSX, Unissu|
Others: Ampolon Ventures (CVC), HighRise Ventures, A/O Proptech, Vito Ventures (CVC), Signa Ventures (CVC)
Accelerators are start-up support programs that usually take place once a year for several months. Often the initiators themselves invest in the respective start-ups, but beyond that the cooperation with experts and the development of a network is the main focus. Most of these programs are cross-sectoral. These two are focused exclusively on PropTech:
|HQ: Frankfurt am Main|
Initiator: Nassauische Heimstätte
Startups: Fresh Energy, home-iX, Smartivate, u.v.m.
|HQ: Frankfurt am Main|
Initiator: blackprintbooster, M.Stilke
Startups: Simplifa, Exquance, Stegimondo, u.v.m.
If you want to get a general overview of the subject of PropTech, taking a closer look at these blogs will be a good idea.
Nikolai Roth (CEO Maklaro, speaker Bundesverband Deutsche Startups e.V. – Platform Proptech Startups) has been sharing articles about events from the PropTech scene since October 2016. Today, at least one article per month is published in the categories “PropTech Round-Up”, a summary of the most important news of the month and “PropTechs im Gespräch”, where individual startups are interviewed and presented.
Jonas Haberkorn started back in 2015 to prepare PropTech news for his readers and to highlight digital topics related to the real estate industry.
The focus has always been on a holistic overview of the start-up landscape. Furthermore, Haberkorn prefers to share closed VC deals and since 2017, event announcements have also played a central role.
Since January 2017, Schwyter Digital GmbH has offered PropTech News, an online service for real estate and technology professionals.
On average, an article on various PropTech topics is published almost weekly.
Basically, the site is very simple and the articles can be filtered by individual startups or topics such as Blockchain, BIM or AR.
So-called PropTech Maps are also useful for a quick survey. These usually refer to a local market and are shared on different sites, like the blogs mentioned here.
Also, more common media occasionally serve as PropTech information sources. Especially about current investments and financing rounds these magazines keep interested parties up to date:
|Real estate News, Online Magazine|
Frankfurt am Main
|Trade Journal, Online Magazine|
|Daily Newspaper Economics and Finance|
|Trade Journal and Online Platform |
|Magazine, Trade information and portals|
Freiburg in Breisgau
Gründerszene is a media brand of Vertical Media and describes itself as the “platform of the German Digital Economy”. In addition to an online magazine, it offers a job exchange and a database containing start-ups, investors and people in the German digital economy.
Grüne-Startups is an online platform about sustainability and green innovations in the start-up sector. This site also has a career section and a startup index. In addition, new podcast episodes appear regularly.
At deutsche-startups.de, news about start-up events and the Internet start-up scene are published daily. The offer includes articles, a podcast, a startup live ticker and a startup guide about events and local hotspots in various cities.
Networking has been gaining in significance in society for years and since this has to happen somewhere, so have the networks themselves. Different networks and associations have different focuses. Startup networks mainly always have 2 intentions:
1. Bringing different founders within the startup ecosystem together, so that they can learn from each other or work together.
2.Integrating the business models of the start-ups into practice by having experts from the industry supporting the founders and connecting them with further contacts.
In the German-speaking DACH area, 4 important network groups have already been formed in the meantime, which deal exclusively with the focus topic of PropTech.
Important sponsors of the industry have joined these groups, e.g. the German PropTech Initiative is working with the “Zentraler Immobilienausschuss” (“Central Real Estate Committee”) through a reciprocal membership.
The Bundesverband Deutsche Startups e.V. is also active and has its own PropTech platform.
Accelerator, investors and various networks have already made it their goal to integrate start-ups into real processes and let them participate in what is happening in the industry. By 2016, the digital transformation was still only cited as a constant component of business strategy by 24% of the 2,000 companies from the real estate sector surveyed in the “Digitalisierungsindex Mittelstand”, a study commissioned by Deutsche Telekom. Today we can see from various examples of large companies that the importance and potential have finally been recognized:
The Innovation Think Tank of the “Zentraler Immobilien Ausschuss” (Central Real Estate Committee) has been driving forward the culture of innovation for years through innovative cooperation. In 2019, pwc and Evana AG also jointly initiated a think tank for the digitization of the property industry.
Other examples of companies that have understood the importance of start-up cooperation are:
Individual solutions increasingly work together and develop into larger value chains. Examples of cooperation among PropTechs are:
|KOOPERIERENDE STARTUPS||READ ARTICLES|
|“Propster cooperates with Visoplan” – Immobilien Zeitung|
The market for PropTech start-ups is very dynamic and has grown rapidly. Not only in Germany, Austria and Switzerland but also internationally, for example in the USA. Therefore, we would like to present eight start-ups that drive the digital real estate and construction sector and are particularly active in German-speaking countries:
HQ: Stuttgart Foundation: 2015
Business: Bimsystems is the world’s leading specialist for BIM and the only provider of a cloud-based solution: BIM content is generated (product data is automatically digitized), interfaces are connected and data is transferred.
HQ: Berlin Foundation: 2016
Business:With the help of Big Data, 21st Real Estate optimizes the investment process by making the valuation more precise and thus enabling online real estate trading.
HQ: Berlin Foundation: 2019
Business:Ecoworks enables Net Zero modernizations: the renovation of houses in a few weeks through modular construction and highly efficient energy systems.
HQ: Wien Foundation: 2013
Business:PlanRadar is a cloud-based software provider for an app designed for construction documentation to avoid downtime and follow-up costs.
HQ: Berlin Foundation: 2012
Business: Architrave provides a digital asset management platform for the real estate industry and is also working on RPA in conjunction with AI.
HQ: Berlin Foundation: 2012
Business: Kiwi.ki offers a keyless entrance system that allows residents, the housing industry and service providers easier access to the property.
HQ: HH Foundation: 2014
Business: Exporo is a crowd investing platform for the democratisation of the European market for real estate investments. A digital trading place ensures flexibility.
Goals and Trends
Good news for all people not involved in the real estate industry is that they can and will still participate in the PropTech revolution. Because even if many startups are in the B2B sector, B2C`s or even B2B2C`s will have a remarkable impact on everyday life within the next years.
Central technologies such as BIM, VR, AR, sensor technology, robotics, AI, IoT, blockchain or 3D printing will play a major role and have a long-term effect on society. Some of the goals addressed by PropTech are:
Short-term rentals enable portfolio owners to achieve higher occupancy rates. Starting with airbnb, startups today offer not only rental platforms, but also additional management and service solutions that are technology driven and therefore highly efficient. They make agent or cleaning fees redundant.
BIM – Building Information Modeling
All building information data is made accessible by BIM to all actors involved (in the construction process). Their lack of cooperation can thus be remedied and the basis for a wide range of solutions is created. For example, for smart building solutions such as thing-it, that are dedicated to CO2 reduction.
Since wework we know that the workplace on subscription basis is very popular. With the flourishing innovation and start-up culture, the expectations and needs of the workplace have also changed. Huge sums of money have been invested in these services by companies and corporations in recent years.
Digital tools show new ways of organising a construction site and providing all the information needed. Project management is simplified by BIM. From inspection to resource consumption, employee scheduling and predictive warning systems, there is a wide range of startups on the market.
Voices about the PropTech World
In addition to our forecast, we have asked some experts about their expectations for the development of the PropTech world in 2020. They tell us what the real estate industry can expect:
„The PropTech scene has developed very dynamically in 2019 and several specialized Venture Capital Funds have been established. This strengthens the entire ecosystem for PropTech start-ups and promotes implementation into existing processes. Many of today’s players now have the task to optimize their product in a sustainable way. In my opinion, the developments around entirely digital control processes to coordinate the many stakeholders in the construction and real estate industry will be particularly exciting.“
„To establish an innovation on a broad scale, a separate digital solution is not enough. You need a full service that delivers added value for real estate companies. That is why PropTechs should not just deliver a digital product, but should also think through the associated process. Only then it will result in a complete product.“
“For the real estate industry, PropTechs are a beneficial source of fresh air. In order to ensure a lasting added value for the industry, there will (have to) be even more courage on the part of PropTechs and established companies for real collaboration. Instead of small pilot projects, business models will then be changed or newly developed together in the coming years, but without being flawless. But “Done is better than perfect”!”
„The PropTech market is facing a healthy consolidation after the founding wave and more than doubling in the last two years. After the hype, mergers, acquisitions but also market exits will lead to an overall strengthening of the PropTech scene in the entire real estate life cycle, whereby especially the ConTech sector will show development in 2020.“
„Where the wealth of experience from the industry comes together with the new approaches and the speed of PropTechs, real innovation is created. The PropTech market is very diverse and seems to continue to grow, so we are expecting many and high quality applications for our Contest 2020. Through an early and constructive exchange we can help to shape the processes according to the needs of our industry.“
Stay up to date
The start-up market is considered to be very intransparent, which is due to the fact that new companies are founded and registered every day, but a large number of them are also closed down. In contrast to the usual search for a company, in this case there are initially no annual financial statements and none to few references available. In addition, start-ups often change their business models and are by definition subject to high risk. For interested medium-sized and larger companies, this complicates even the first impression. Insights from the outside are therefore extremely vague, but can be made more precise by a certain start-up understanding and experience.
In order to share this understanding and years of experience in the startup landscape, Ambivation offers various services, such as the research of relevant startups in a Startup-Monitoring, or strategic cooperation consulting and event formats such as tailor-made Startup-Tours.
Startup Monitoring involves matching the company’s focus areas with the market, with Ambivation working through hundreds of PropTechs in Germany and thousands worldwide. This allows companies to focus on the most relevant startups and collaborations.