The Next Big Thing
Which PropTech Companies are Well Positioned to Make it Big?
Over the past few months I have covered many different topics in PropTech, but I wanted to devote this week’s article to companies that I believe have the ingredients to become the next big thing. I am so passionate about PropTech because there are so many problems to tackle in the real estate industry and I am so inspired to see how such intelligent entrepreneurs approach these massive challenges with creativity and ingenuity. The real estate industry is still archaic in many ways and it impacts everything from the environment, to the financial system, to where people work each day, to where they raise their families. Unlike many industries where the challenges are clear and everyone is chasing the same solutions (usually around efficiencies and cost savings), PropTech invites so many different unique and innovative ideas. From the way people purchase homes, to energy efficient buildings, to the way investments are made, PropTech addresses real world challenges that affect just about everyone on the planet.
Each day I learn about new companies and business models, but I wanted to focus on the players that have really grabbed my attention. Companies come and go, and new models often fail. There is no guarantee that any of the companies below will make it, but each one of them have something unique and compelling about them that impressed me enough to include them on this list. The companies range from Pre-Seed to Series D to Publicly Traded.
Home Base: Montreal
I first learned about BrainBox AI in late 2020 when they were recognized by TIME as one of the Top 100 Inventions of the year. HVAC systems are a significant contributor to a building's OPEX costs. Many companies are focused on HVAC optimization to not only reduce costs, but also to contribute to a cleaner environment. I've always been interested in this segment of the market, but it was the recognition from Time that really piqued my curiosity to learn more about them.
BrainBox AI offers a unique technology combining deep learning, cloud-based computing and algorithms to support a 24/7 self-operating building. BrainBox AI is the leading autonomous artificial intelligence (AI) technology for Heating, Ventilation and Air Conditioning systems (HVAC). The technology is installed in half a day and truly integrates seamlessly to the building’s HVAC system. BrainBox AI enables up to a 25% reduction in total energy costs within 3 months, with no CAPEX. It also improves occupant comfort by 60% and decreases the carbon footprint of your building by 20-40%.
I asked BrainBox AI’s CTO Jean-Simon Venne what makes their solution unique/better than others currently on the market. Here is what he said:
“BrainBox AI installs only one edge device and relies on autonomous AI to self-learn and then operate the building. Our solution is substantially more scalable than those of competitors. Generally speaking, BrainBox AI is able to achieve the best results in the market, at the fastest pace”.
Home Base: Toronto
I first learned about Enso Connect when Co-Founder and CEO Francois Goeulo posted an introduction on a PropTech Slack Channel that I am a member of. He described the company this way: “We offer a guest communication system that leverages smart home devices and AI chat tools to provide a seamless experience to homeowners, property managers, and guests in the short term rental space”. They are pre-seed, which typically is too early for me to get super excited about, but the traction that they have built was impressive. In less than a year, they have added over 45,000+ bookable units on their platform in 12 different countries.
Always eager to learn about new companies, I pinged Francois and asked if he was open to a conversation. I’ve met many entrepreneurs in my life, and oftentimes their egos are off putting to say the least. This was not the case with Francois. He was very polite, humble, and soft spoken, and as he told me about his vision I really bought into what they are building. While I usually don’t endorse pre-seed companies based on their high potential for failure, the character of the team, their vision for the future, and their early success made me a believer.
What they do: Enso Connect is a guest experience management platform that leverages smart home devices and AI communication to provide a seamless experience to homeowners, property managers, and guests in the short term rental industry. Their mission is to significantly reduce the operational costs of property managers and hosts by providing them with a tool that will help with any of the guest facing experiences.
I asked Francois what makes their solution unique/better than any other similar solutions on the market? Here is what we said:
“Enso Connect is not a property management software, but a guest experience management platform. Our core strength and differentiation is in combining the power of IoT with strong AI driven communication. Our secret sauce is in working with existing players in the industry (including property management systems), and focusing purely on the guest experience - that means leveraging our technology to provide a predictable process for guests, just like a hotel would, all while creating new experiences in each unique short term rental property. As a hospitality manager, you can focus on the hospitality aspect of your business, connecting the local community, creating memorable moments, and driving new and returning customers to your places; no more dealing with the tedious day to day tasks. Our vision is crazy and simple - a vacation accommodation that runs itself."
Home Base: Oakland
I was introduced to Rookstock by a friend. The more that I learned about the company, the more convinced I was that they were building something special. Investing in real estate typically involves a significant amount of capital, which oftentimes prevents a beginner from participating. Unlike opening up a trading account on Robinhood and intuitively buying shares of equities, investing in real estate is a more opaque process. Personally, I’ve always wanted to invest in real estate, and even though I have been in the industry for 20 years, I honestly didn’t know where to start. Many other folks are in the exact same position. Roofstock is looking to change this.
What they do: Roofstock is the leading online marketplace for buying or selling investment homes. They offer a tech-driven platform which enables users, from first-time investors to savvy real estate moguls, to evaluate, purchase and own residential investment properties with confidence, sight unseen from anywhere in the world. Every year in the US alone, there are over 1 million homes bought for investment purposes in a manner that is highly antiquated. I asked Roofstock’s CMO, Suresh Srinivasan, why he was so excited about the company’s future. Here is what he said:
Roofstock is leading the desperately-needed fintech transformation of this $4 trillion market, making real estate investing more accessible, cost-effective, and simpler than ever before.
Home Base: Montreal
Funding: Publicly Traded
Founder: Ghislain Lemire
After publishing one of my blog articles earlier this year, I received an email from a board member of a company named Urbanimmersive. He asked me if I was interested in learning about the company. I had never heard of them, but I’m always happy to take a meeting to learn about PropTech companies. Before I took the call, I started researching them online. The demo posted on their homepage totally blew my mind. I was skeptical at first because I have seen company demos before that operate very differently in a controlled environment than they do in real life. The company was publicly traded which added some credibility, but my first question to them was “Why have I never heard of you?”. The answer that they gave me was actually very refreshing. Even though they were well known in the photography world, they wanted to make sure that they got their offering perfect before they really started to promote it to the real estate community. All too often, companies roll out technology that is half baked and not ready for prime-time. Urbanimmersive took a different approach. They spent so much time perfecting their new solution UiMeet3D, that they wanted to work out any bugs before they released this solution to the market. They gave me full access to the software and it worked exactly the same in normal use as it did in the demo. After several meetings, the team invited me to join their board of directors - which I happily accepted. I like to stay impartial with my articles, and I typically will not promote a company in my blog that I am involved with. But Urbanimmersive 100% deserves to be on this list. Regardless, I want to make sure that I fully disclose my connection to this company.
What do they do: Urbanimmersive has built proprietary technology to create 3D Tours. Unlike their competitors, they are camera agnostic… any 360 camera will work. But what truly sets them apart is that they are the first company to come to market with a fully interactive and immersive 3D Tour. As you can see below, real estate agents can meet with their clients “live” within the tour (it works with more than 2 people as well).
They have gamified the 3D Tour industry and have taken what is typically used as a marketing tool (3D tours), and have transformed it into a fully interactive sales tool. They can white-label all of their solutions, and the price points are lower than you would pay for most traditional 3D Tours that come without any of the interactive features.
These are just a few features, but check out this video for a more comprehensive overview of their solution set.
Home Base: San Francisco
I learned about Radius through an email conversation with Pete Flint. When someone with the track record in PropTech startups like Pete Flint says to check out a company, I listen. As I have written about in the past, many companies are trying to disrupt the residential real estate industry by removing the agent. I am a staunch believer that agents are key to a successful transaction, and Radius is not trying to remove them; they are empowering them. Aside for a complete set of cutting edge marketing tools and lead gen tools, Radius focuses a lot of attention on one of the most important facets of the business: agent-to-agent referrals. They began as a social network and lead-gen marketplace, attracting a user base of 70,000 agents. In August of last year Radius announced that they were launching a virtual brokerage. Radius Co-Founder Sanya Gurnani explained the evolution of the company to Inman News:
“After launching these products and growing these businesses and having a tech platform that agents rely on, we’re now excited to launch Radius Agent Realty,” Gurnani said. “The premise here is the same, we want them to grow their businesses, we want them to have more earnings.”
How does it work: Radius is a full service real estate brokerage that operates a mobile platform with tools designed to empower agents to generate business by branding and marketing themselves and trading referrals and local market intel. Radius’s agents are not on traditional splits. Instead they are charged $55 per month (the fee starts at $55), along with a per transaction fee ranging from $500 - $900 (based on whether the agent chooses to include the support of a transaction coordinator or not).
Below is how they compare their offering to a traditional model:
Radius is not the first company to attempt a mobile brokerage or a flat-fee model, but with the backing of Pete Flint, this is definitely a company to keep a close eye on.
As I was preparing for this article, I had the pleasure of meeting with some amazing founders and learning about some truly disruptive companies. In future articles I hope to profile more companies because it was difficult to limit this list to just 5. After finalizing the selection process, I realized that I inadvertently only included companies based in the Americas, but there are world class PropTech startups overseas that are due their recognition as well. What was exciting to see was the amount of innovation coming out of Canada where the PropTech scene is vibrant. If you want to learn more about the Canadian PropTech landscape, there is no better place to start then with my friends at the PropTech Collective. They recently published the following overview of their organization which I highly recommend checking out: Linked Here
There is no better time than now to be in PropTech. The pandemic was devastating and had truly horrific ramifications. I in no way want to minimize the lives lost and companies that were destroyed by the pandemic, but there is no doubt that it accelerated the need for the modernization of the real estate industry. The pandemic is not over and many challenges remain, but I believe that there is an end in sight. PropTech is playing a significant role in getting people back to work and on the path to normalcy (or at least a new normal). The pace of innovation is at an all-time high, and I am humbled to see the strength of the global PropTech community.
I will be publishing my first Wednesday Edition of PropTech and the Future of Real Estate. I will be joined by a co-writer (who happens to be one of the smartest people that I have ever had the privilege of working with). While the article will be pertinent to PropTech companies, the strategies discussed will be applicable to growing any type of business. Please subscribe via the link below to have the article delivered to your inbox on Wednesday morning. If you are looking to scale a company, you will not want to miss this one.