The real estate market is increasingly appearing on the radar for tech disruption, as startups seek to remove the numerous inefficiencies and costly processes that create major pain points for consumers. It’s a lucrative space to operate in and as London’s property market continues to boom there’s a new generation of companies coming to the city in the hope of grabbing a cut of that market, while improving the experience for buyers, sellers, renters and landlords alike.
Encouraging would-be estate-agent-killers is London’s newest niche accelerator Pi Labs, which focuses exclusively on startups looking to disrupt the property and real estate markets. The accelerator is launching in partnership with property-focused venture capital firm Spire Ventures, as well as commercial real estate firm Cushman & Wakefield - a sign that established players in the space are already keeping a keen eye on ambitious startups.
"As a hub of international property activity, London is the natural home for this emerging movement. The London property market and all the services that surround it are antiquated and a constant cause of angst for occupiers," says Pi Labs founder Faisal Butt. "Yet, London is also home of TechCity where cutting-edge ‘Property 2.0’ businesses are emerging as a counter-cultural reaction to this public angst."
Niche Accelerators And Crowdfunding
Companies in the property tech space raised more than USD600m last year, according to StrategyEye data, with more than 55 companies receiving funding. However, Pi Labs is tapping into more tech trends than just investor thirst for property tech. Niche accelerators are becoming increasingly popular as a means of jumpstarting emerging sectors and nurturing new talent.
“We think the fact that we are a niche accelerator is a bonus for these startups, as we have longstanding expertise in property tech," says Butt, who is also the founder of property-focused Spire Venutres. "The startups will get access to industry mentorship plus funding and I think they will benefit enormously from being at such a collaborative and fascinating workspace as Second Home in London.”
The other major trend that the accelerator is taking advantage of is crowdfunding. On the same day that Pebble raised more than USD1m in half an hour for its new smart watch, Pi Labs launched a campaign for investment in its first fund, targeting GBP500,000 (USD771,000), on UK equity crowdfunding site Seedrs.
"We think this is extremely important. The people should be at the centre of the next generation of property companies," says Butt, explaining why Pi Labs, despite being partnered with a venture capital firm, is choosing to raise its first fund via crowfunding.
"Property used to be an old boys club - we want to open it up to the masses and share the wealth and the innovation of this industry. Our strategy has always been for the Pi Labs fund to be invested in by property corporates that are interested in innovation, the people who work in these corporates, as well as the startups that are looking to disrupt the status quo. We believe that the future of property can only be built if the startups and corporates collaborate."
Meet The Companies
Pi Labs recently unveiled the first five companies that will join its programme and they highlight the range of different ways in which startups are disrupting different parts of the property market.
"They are early-stage businesses, with two or more employees, preferably one technical and one commercially minded founder," says Butt. "They also must be innovating within the property sector in some way."
Perhaps the poster child for disruption in the property market, Airbnb is continuing to transform the way consumers think about holiday accommodation and renting out their homes. However, there are still inefficiencies in the system such as keeping the property clean, should the guests happen to throw a party, or transferring keys. Similar to Guesty in San Francisco, AirSorted wants to provide a concierge service of sorts to take care of any of the associated hassle, cleaning bed sheets, carpets and ensuring keys get handed over on schedule.
“Our challenges are logistics, it is important that we develop innovative ways of handling this so we can continue to provide a low cost service to our customers,” says CEO James Jenkins-Yates. “Organising cleaners, greeters, guests and repair people is no easy feat and we are developing technologies to make that easier!”
The young startup is attempting to outsource as much of the service as possible, but for now the three founders are still running off to transfer keys themselves.
2. Land Technologies
You can't have a building without land. However, for developers, finding that land and getting all the information about it together to ensure its suitable for development can be challenging. Land Technologies brings information and analysis together to make procedures and putting technical documentation together easier.
"It is difficult to assess land for its potential for housing. A lot of data is out there but it is hard to access, time consuming to collate, technical to manipulate and often expensive to buy," says founder Jonny Britton.
As with any startup attempting to disrupt a long-established industry, one of the main challenges for land technologies is the slow pace of change and Britton says: “Data suppliers are not yet well set up to work with smaller companies with innovative models and it can be difficult to communicate with large organisations without established routes to influential people.”
Focusing on the lucrative world of commercial property, Rialto provides a relationship management platform for landlords and brokers. The team is actually based in Belgium, reflecting the fact that companies from more than 50 different countries form regions including Asia and Africa, applied to be a part of Pi Labs. Rialto will now make the move over to London to help grow its platform.
“We help commercial property brokers and landlords service their clients better by collaborating in real-time,” says Rialto founder Nicolas Kint. “We might be looked at as bringing more transparency to the sector, which would frighten dominant players lose position.”
OfficeR&D claims that more than 75% of office workers are unsatisfied with their workplaces. That adds up to a lot of office blocks full of grumpy people. The Sofia, Bulgaria-founded company claims this is primarily the result of poor office planning and offers a cloud-based collaborative platform to allow businesses to design better workspaces and optimise their space.
As with many tech companies moving into the property market, the clash of different worlds can make doing business a slower process then many would like. “The main challenge we are facing is to validate our assumptions,” says co-founder Miroslav Miroslavov. “We are coming from the IT sector and meeting professionals from the commercial real estate sector is challenging for us.”
5. Wilde Rooms
You go to a shopping centre looking for a jacket. Nothing too complicated and after four hours, seven stores and two miles of walking you finally find the right one. Wilde Rooms aims to make shopping trips more efficient by allowing users to select items from different retailers online and then try them on in one luxury dressing room. The company taps into retail trend of bridging online and offline, best seen in the success of US chinos retailer Bonobos. Wilde Rooms claims its already in talks with one of the UK’s major shopping centre companies.
“We are attempting to disrupt an industry that has vastly wealthy incumbent operators that rent their constructed space to retailers for high rental premiums,” says company CEO Kevin Dhami. “Our biggest barrier to entry is the cost of securing the right real estate in the right retail location to prove that the Wilde Rooms method of retail is a viable commercial proposition.”