PropTech Is Taking Off
Isadora Teich wrote this article
You may often hear people make blanket statements such as “tech is changing everything!”
While that is catchy, and it is actually true, it is also pretty vague. That’s why I want to take a closer look at the specific niches app technology and new approaches are on the verge of revolutionizing.
We have already seen Airbnb change travel forever, digital healthcare options explode onto the scene, and apps even change how we date and make friends on a wide scale.
Something else that may make sweeping changes on the market and society, in general, is PropTech.
Let’s take a look.
What is PropTech?
Many people from outside of the industry feel fatigued by a seemingly endless stream of new tech-related jargon.
While this can be confusing, it exists for a reason. So many new things are happening all the time, and the language reflects that. PropTech is used to describe any innovative or disruptive technology in the real estate space.
This includes many different things. It can include hardware, software, and even technologically advanced approaches to material creation and construction.
Usually, it is used to describe startups that are involved in the renting, buying, selling, management, building, or listing of real estate properties.
Remember FinTech, in which this forward-looking approach is applied to the financial space? Proptech is its slightly younger cousin.
There have been some interesting developments in this space lately, and it’s important to take note of them. In the future likely so much of what we do every day will undergo a complete tech transformation, and these innovative companies may be leading the charge.
Carvana For Property Management
The elevator pitch of PropTech startup Simplifyy is this:
“Carvana for property management, Simplifyy is the first tech-enabled multifamily property management company — we help owners get peace of mind with more money and better data. Simplifyy’s software handles 100 percent of what it takes to operate your properties, making multifamily operations simple.”
Have you ever seen those massive multi-story glass buildings that essentially resemble giant car vending machines?
Those are the buildings belonging to Carvana, an online-only used car dealer that has become massively popular in the US. Carvana is known for enabling people to buy, trade, and sell used cars easily, and also their fun social media presence.
They are an excellent example of a classic task being streamlined with tech, and Simplifyy wants to do the same for property management.
Simplifyy Is Making Big Moves
This Kansas-City-based startup already managed properties in Kansas City and Indianapolis, but thanks to a massively successful recent funding round have plans to expand quickly this year. The $5 million round was Led by UnitLeader, a San Diego-based venture capital group.
This did not happen overnight.
Simplifyy co-founders Jake Lisby and Paul Worcester spent nearly three years building the software and beta testing on their own properties. Their company officially launched in October 2019, with over $4 million in investments from the founding team.
After the recent successful funding round, they have plans to expand in cities throughout the South, Southwest, and Midwest.
What Does Simplifyy Offer Users?
Of course, any successful app needs more than funding.
It needs to be something that actually streamlines, improves, or offers new opportunities to users. Simplifyy offers interesting benefits to both the managers of properties and the people who want to live in them. It integrates smart home tech into one single platform, and allows owners to see financials, maintenance, and even resident activity via app. Lisby says:
“Most properties have been managed using multiple software programs that aren’t integrated, which creates inaccuracies and inefficiencies. We’ve achieved our very specific goal of developing software for the totality of managing operations. And, because the software is run by our team of multifamily industry veterans, we provide not only turnkey management, but best-in-class resident service.”
There are also benefits for renters. This includes 24/7 self-tours for residents and a 24/7 resident concierge team to help residents whenever they need it. This would be impossible without tech intervention.
Compass Goes Public
Many startup tech companies have gone public over the last year or so, including Bumble and AppLovin.
PropTech startup Compass is one of the latest to join them.
Last year the stock market was booming ridiculously after the pandemic crash, likely inspiring many companies to go public.
However, at least so far, this year has been very different. So far, there has been a large dip almost every month in 2021. Every few weeks, the news cycle buzzes with market crash hysteria, and people are even starting to doubt tech stock golden child Tesla.
This instability has caused many businesses to delay their IPOS. Compass is an interesting exception.
What Is Compass?
Here is what Compass says about themselves:
“Your guide to finding a home you’ll love, Compass Real Estate combines best-in-class technology with exceptional real estate agents to make your search for homes smart and seamless.”
They operate in numerous cities throughout the US, mostly on the coasts.
You can use it to browse real-time listings to buy or to rent organized according to your criteria, organize what you are interested in, and even connect with their real estate agents.
The Company’s IPO Debut
Compass debuted at $18 a share, a pretty low price.
However, it did have some success on its first day, rising over 10% a share. It closed the day at just over $20 per share. It sold 25 million shares at its IPO price for a gross worth of $450 million.
However, it is important to note that overall, waters are choppy for startups going public right now, which is a part of why so many have chosen to delay.
For example, European food delivery app Deliveroo has had a disappointing IPO debut, making experts wonder if these hot unicorn companies will not do as well outside of an American market.
While the Compass debut should not be considered a failure by any means, they did release fewer shares, and these had a relatively low price.
It is likely only a matter of time before most industries are run by apps, algorithms, and automation.
Keeping tabs on this journey is fascinating, especially now, at the precipice of it all.
What do you think? Are you looking forward to the PropTech takeover?
Talk to me.
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