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Emerging PropTech Trends in US and Canada

15.10.21

Let’s reviews the emerging trends within the US and Canadian PropTech market.

 

This is a continuation to our four part blog where we look back over the last year of PropTech in the US market. Last week we reviewed the effects of  COVID-19 on the Proptech market, this week we focus on the stand-out PropTech startups and review a number of verticals that they have emerged in; Climate Change and ESG, Affordable Housing, Flexible Workplace, Construction Technology.

 

According to Unissu, there are 2234 PropTech companies… and counting reported in the US. There are so many different verticals such as ESG, Data, SAAS, ConTech. Let us look at some of the trends that have emerged.

 

Climate Change and ESG.

 

Climate change and ESG are very hot topics within the PropTech industry at the moment. 40% of all global emissions come from Real Estate, and around 30% of total raw materials go into construction. So the PropTech industry really has a big impact to make.

 

To really drive ESG forward, there are many investors who are now asking Real Estate owners and asset managers for more information on their Real Estate activities and ESG programmes. Investors are making decisions into those companies that have a plan in place when allocating capital in order to move everyone towards a net zero future.

 

In order for ESG reporting to take place and for us to know what is happening on the ground requires credible data, which is often very difficult and time consuming to obtain and can be very expensive. Even though there is a lot of building data that is available today, there are new tools that are needed to unlock everything that is required to measure and report and take action on ESG performance within Real Estate. If we look at Enertiv, a startup based in New York who collects big and accurate data for commercial and industrial Real Estate assets, their data is high quality and very positively received by owners and operators due to the game changing technology they supply.

 

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Startups like Novisto from Quebec or Manifest Climate from Toronto are building technology platforms to help Real Estate clients identify and manage how climate change is impacting their business. Manifest Climate recently raised $6.5 million in their seed financing round from Omers Ventures back in February, Novisto also raised $8 million in their series A from White Star Capital, with participation from Diagram Ventures in May of this year.

 

There are a lot of technology solutions that are helping with decarbonisation efforts such as smart building solutions, and facilitating better data management and bringing operational savings and carbon reduction across buildings. BrainBox AI, a startup from Montreal, who’ve developed a technology that allows the buildings HVAC system to operate autonomously which as a result is allowing commercial buildings to see significant energy and cost savings, and is essentially reducing carbon footprint.

 

Another notable PropTech startup is Toronto based Peak Power who have an AI powered software that forecasts the grid needs, electrical grid needs, and optimises the operation of buildings, in terms of the energy and energy storage systems that they have to make sure all the batteries and electric vehicle chargers are are balancing against the load that exists in a city.

 

Affordable housing.

 

There is a severe shortage of affordable homes across the world both in rental and for sale, which has been accelerated by the pandemic. According to the National Low Income Housing Coalition, in the US the shortage for affordable rental housing equates to around 3.4 million. We take a look at a number of Real Estate technology companies that are helping service it and manage the issue.

 

Canada is lacking in supply of housing, the demand is much higher due to immigration rates. Over the last year there has been a boost in technology companies that are helping to increase participation in homeownership. There are a couple of different ways we are seeing ProTechs aid the shortage for example, alternative financing solutions. PropTechs such as Properly and Requity Homes that are helping first time homebuyers or homebuyers get onto the property ladder and build up their equity into their homes.

 

There is also fractional ownership solutions that are increasing the accessibility to invest in Real Estate and not necessarily moving into the house, but just investing as a retail investor. Some of those examples include Properly and addy in Vancouver. Other tech companies that are also focused on bringing more affordable rental options in the city and via co living are SoulRooms who enable landlords to rent entire units as rooms for better returns and Roost, who make long term rental as easy as booking a hotel, both from Toronto.

 

With affordable housing, there’s a way of making the business model work, but there’s also a different way in terms of increasing the supply. In the prefabrication construction space there’s companies that are emerging within the Real Estate technology to not only improve supply, but also decrease waste as we’re building up new housing options. Some examples include Promise Robotics whose mission is to help builders and Real Estate developers leverage the efficiencies of industrialised automation to result in a more affordable and sustainable construction process.

 

COVID has really taken a toll on economics for many people, and there has been a high increase in unemployment. Affordable housing can be highlighted in different ways, such as landlords making it easier for people to stay in their homes, especially if they are suffering from financial hardships. Till is a PropTech company that’s designed to help prevent evictions and the practices that lead to them. Rather than having to pay rent to university on the first of every month, which is what many are used to, they help analyse the renters cash flow and break their payments up in smaller cheques to help them make their payments. By helping people from lower income brackets break down their rent into these daily payments is really going to help people stay in their houses and be able to have that shelter and manage their cash flows. (Listen to David Sullivan explain the World of Flexible Rent and Delinquent Paying on The Propcast) .

 

We recently hosted a webinar with a fantastic and experienced panel, in partnership with Metaprop to discuss affordability and revitalization within urban districts. Check it out here.

 

Flexible workspace, the new norm, the future of the workplace and getting back to the office.

 

It’s an interesting one for us, being positioned as recruiters because of the rise in flexible working which has resulted in brilliant tech from the likes of companies such as essensys. For us, when it comes to placing new, or younger talent into businesses where you aren’t going into an office as much or meeting your team in person, the culture can become fractured. So we are divided when it comes to tech and talent.

 

At the beginning of lockdown across the world, people were thinking ‘That’s it! Co-working is over’.

But it hasn’t ended up like that, everyone has become much more open to working from home. There is now the movement of going back to the office space, and many companies with an office are seeing that not everyone is in every day, most are going in 1-3 days a week. As a result there is a need and demand for flexible working spaces which has created a huge opportunity for Real Estate tech and smart buildings.

 

 

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It’s a combination, and an opportunity for companies to save a little bit of cash as well, you don’t have to have that flashy office that’s draining money every month because there’s no necessity to have to draw in talent with it. The main challenge that comes with flexible working is the culture. For young employees, how does that work on the training side of things, because a lot of how you learn is from listening into conversations and being able to say, ‘I’m struggling on this, what do I do?’ If you’re constantly having to slack someone or email, or jump on another zoom meeting, it doesn’t feel natural. Going forward, Covid-19 may have changed the way we work forever, there will be a combination of work from home and in the office, the new normal is “hybrid”.

 

An interesting vertical within the flexible workspace is the information workplace management sector,  there’s a lot of businesses or startups that have been perfectly positioned this year for heading back to the office. DensityVerge Sense and Saltmine are helping companies understand how people are using the office space and where people are in the building at any certain time. Analysing the need for the space you have has been an interest before the pandemic due to potential cash savings and it has now become a far greater demand to be able to have a checklist back in the office, knowing when a desk has been cleared, and that someone has cleaned it, adhering to new health and safety measures.

 

ConTech. (Construction Technology)

 

Real Estate is incredibly behind the likes of FinTech, then construction tech is years behind that as well. It’s one of the few industries that’s actually seen a massive increase in efficiency over the last 25 years. There’s so much opportunity for technology to challenge and innovate within the sector. Looking at businesses such as OpenSpace and OnsiteIQ, who are on a mission to bring new levels of transparency to construction.

 

Lots of businesses that are thriving in terms of helping construction sites gain visibility, whether it’s over projects or safety features, and as a result of the pandemic they’re trying to become more efficient, and therefore drive profits, these sorts of technologies can ultimately help their businesses thrive.

 

LMRE in the US: 

 

As we continue to partner with many of the early-stage adopters and entrepreneurs within the United States and Canada whose biggest challenge is finding the right resource to help them scale their teams and products.

 

Are you scaling your business as technology becomes ever more prominent within the Real Estate industry? We can help your business by saving you valuable time and money and search the market for you – leave it to us, specialist PropTech recruiters. Leave your details and a consultant will give you a call back today.

 

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