The PropTech Canada Report by the PropTech Collective

About Guests

Julia Chelaru

https://www.linkedin.com/in/jchelaru/?originalSubdomain=ca

Julia is a start-up workplace experience consultant and co-founder at the Proptech Collective with a BSC in Chemistry and Economics from the University of Waterloo. She started her journey to PropTech and 2015 as an innovation strategy consultant at Founders Intelligence in London. As Julia’s passion for helping entrepreneurs succeed in growth, she joined TechStars to launch and run the first ever international PropTech accelerator program. Julia is a community builder at heart. She loves all things strategy, people and operations and is now focused on building engaged, inclusive and collaborative work cultures and communities that inspire positive change in the tech industry. 

Courtney Cooper

https://www.linkedin.com/in/courtneyjcooper/?originalSubdomain=ca

Courtney is a principal at Alate Partners. In this role, she helps identify and scale promising real estate technology companies, provides market analysis and due diligence, and manages relationships with industry partners. Courtney has spent most of her career in real estate —including more than four years at Dream, leading innovation and business transformation initiatives. She went on to work as an Innovation Strategist at Great-West Life, where she helped one of Canada’s largest financial institutions analyse new markets and identify opportunities for growth. Courtney takes a human-centred approach, developed through her graduate studies in Strategic Foresight and Innovation at OCAD University. She holds a B.S. in Business Administration with a specialty in Operations from Georgetown University.

About The Proptech Collective

https://www.linkedin.com/company/proptech-collective/about/

The Proptech Collective is a collective of real estate professionals, technologists, entrepreneurs, and community builders that believe technological innovation can change the built world for the better. Through the collision of people and experiences, we provide our members with the opportunity to make meaningful connections and elevate their work.

Resources

LMRE website www.lmre.co.uk

UKPA website www.ukpa.com

The Proptech Collective website www.proptechcollective.com

The Canada Proptech Report www.proptechcollective.com/report 

Insights from this Episode

– I think our goal here is to increase collaboration. We can’t really do anything without working with others – Julia Chelaru

– Canada is actively looking to bring in talent and hopefully trying to make it as easy as possible – Courtney Cooper

– I do think the Canadian ecosystem is definitely a key hub for real estate innovation – Julia Chelaru

– I would say that great talent anywhere they are in the world, they have lots of options – Courtney Cooper

– We came to the conclusion that there is basically a need in this space to create a place where people can authentically come together and actually collaborate. So most of the real change happens when people know and understand one another – Julia Chelaru

Episode Transcript

Louisa

Hi everyone and welcome to the Propcast. This is a special edition episode as we will be chatting through the launch of the first ever PropTech Canada report by the PropTech Collective with the founders of it, Courtney and Julia. So welcome ladies.

Courtney

Hey Louisa thanks for having us.

Julia

Thank you for having us Louisa

Louisa

First of all can I just say congratulations on the launch of the report. I’m sure we have reports to come and I can’t wait to chat through the findings in a moment. But everyone who’s listening, the PropTech Canada Report tells you all you need to know about PropTech in Canada. There are three sections of it, which we’ll be going through. So one is exploring the status of PropTech in Canada, the second section will be Canadian Real Estate and PropTech Spotlights. And then we’ll finish off with some of the trends of the Canadian PropTech ecosystem. LMRE are proud sponsors along with PWC and BCD.

But quickly before we dive in, I’m sure you are familiar with Courtney Cooper from Alate partners from a previous episode we did on gender diversity earlier this season. But those who are not, Courtney is a principal at Alate partners. In this role, she helps identify and scale promising real estate technology companies, provides market analysis and manages relationships with industry partners. Courtney has spent most of her career in real estate, including more than four years at Dream, leading innovation and business transformation initiatives. Now Courtney takes a human centred approach, developed through her graduate studies and strategic foresight and innovation at OCAD University. She holds a BS in Business Administration, with a specialty in operations from Georgetown University.

And Julia, who is also joining us today is a start-up workplace experience consultant and co-founder at the PropTech Collective with a BSC in Chemistry and Economics from the University of Waterloo. She started her journey to PropTech and 2015 as an innovation strategy consultant at Founders Intelligence in London. As Julia’s passion for helping entrepreneurs succeed in growth, she joined TechStars to launch and run the first ever international PropTech accelerator program. Julia is a community builder at heart. She loves all things strategy, people and operations and is now focused on building engaged, inclusive and collaborative work cultures and communities that inspire positive change in the tech industry. So again, welcome both of you and why don’t we start with Julia, how and why did you start the PropTech Collective? And then we could go on to a little bit more about when you first decided to write this report.

Julia

Absolutely and thank you for the kind introduction. It’s one of those things that I absolutely love, origin stories, so going back in time the PropTech Collective actually started out of the work that I was doing at TechStars. So for those unfamiliar with the TechStars program, it basically is an accelerator program that brings in 10 companies, early stage companies and helps them get to the next stage of growth. And we were basically taking in 10 up and coming PropTech start-ups and just trying to connect them with our corporate partner Colliers. And during this program, it would be evident to me as the program manager that there’s quite a large silo between the tech and real estate industries. So the language that they were speaking at the end of the day was just a little bit more separate than we wanted.

And I think our goal here is to just increase collaboration, right? We can’t really do anything without working with others. So during this program, I ended up meeting Courtney who was a mentor in it, which was amazing. And we got to chatting about basically the incredible talent that is in the PropTech industry and how many eager technologists want to build solutions for the real estate industry. And we just kind of came to the conclusion that there is basically a need in this space to create a place where people can authentically come together and actually collaborate. So most of the real change, I think as you guys know, happens when people know and understand one another. So to date from our experiences, it felt there were a lot of conferences and lots of big speakers that were going on panels and looking to educate the market on what’s going on. But the approach that we were really interested in taking us to bring people together to solve actual problems.

I can’t really explain much better what profit collective does except for putting together an event. So if you look at our events we actually hosted one before when it was still in person, but it was done at Our Lives (our labs?) and it was just very much focused on how to do this partnership work between start-ups and corporates. We brought together a bunch of folks, including Ratio City and and RBC ventures. And we actually had that authentic conversation happened on stage. So to summarize it all, we started prop that collective to provide that authentic collaborative space and have been fortunate enough to bring together a community that’s enabled us to do so.

Louisa

Awesome. When you first started pitching this report together, we spoke about this earlier, there’s such little data collected on the state of the market in Canada. Did this serve as quite a big barrier in making the report and a hunger to fill the data gap?

Courtney

I was trying to think of exactly where this came from, there’s definitely a data gap. There’s lots of different information sources, but nothing that really puts it all together. So I think that this was actually the idea of one of my co-authors Alice who brought up the idea of writing a report, she’s done a number of these types of reports in her career. And she’s very interested in PropTech and the Canadian ecosystem. And I think when we started, this wasn’t really what we were envisioning. I don’t think we were envisioning creating a report as in-depth or detailed as this, but what else do you do during a pandemic? Lots of time on our hands. And as we kept digging, we kept finding more interesting things and growing the report. But from a data perspective it’s hard, there’s lots of data sources. Pitchbook is the primary one that I use day-to-day so we looked there, we looked at Unissu, we looked at Alate, we’ve met with hundreds of companies a year.

And so we, I looked at all the companies we had in Canada but you really had to pull them together and then categorise them. And so from our perspective, this is a starting point. We had a number of reviewers that we sent out the report to before we published and even from them we’ve got several ideas for other start-ups that we missed and should be included for the future. So I think the way we see this is a starting point, it’s creating the first benchmark and it’s something that will be live and living, and we’re going to figure out how do we create this in a sustainable way so that we can continue to add to it and start to track changes over time.

Louisa

Yes, well I would say it’s a very good starting point. Why don’t you tell us a bit more about the key emerging trends you’re seeing at the moment in the Canadian PropTech ecosystem, so our audience can get a flavour for it.

Julia

I’d be happy to chime in on that. It’s really interesting because having worked in London for a few years I remember when I was leaving, people were, where are you going? I’m going back to Toronto. And everyone was, Oh I understand, everyone had a very favourable impression of the city. And looking through this research and the report, Toronto was the first and basically the biggest growing city in North America, and one of the largest tech hubs. And this is from a report that we’ve also sourced from CBRE. But if you look at the actual where is the Canadian environment going, we have the most construction cranes by a wide margin. So 27% of all cranes in the major Metro areas actually in North America are in Toronto, which is impressive. One third, it’s crazy. So I thought sitting on Primrose Hill, when I was looking over at the cranes in London, I thought that was a lot, they’re everywhere. But it’s also a really interesting combination of the construction industry growing, but also the talent.

So we’re looking at Ontario which is the province that Toronto is in, if it was actually a state in the US it would be the fifth largest by population. So we have lots of people here.

And working in tech, there’s about 24,000 tech companies in Ontario and 270,000 workers in tech. So that’s a big portion of it as well. And then you combine with a talent, the intersection of both real estate customers and also the funding and support systems that exist in place. So when we look at the customer, about 10 of the top 15 institutional real estate owners are based out of Toronto. So this is folks Manulife, Armors, CPP investments as well as the real estate clients. So companies like Oxford, Fairview and as we mentioned before the construction companies like PCL and Acomm. So we have the funding and supports systems in place. So when I talk about support systems, I actually am pointing towards the accelerators that we’ve discussed before, the government funding as well and, venture studios. So it’s kind of this amazing storm of different pieces of the ecosystem that are coming together and they’re all centred in Toronto.

So I do think the Canadian ecosystem is definitely a key hub for real estate innovation and Canada is definitely creating an incredible home for the next generation of PropTech start-ups.

Louisa

It’s definitely an emerging hub, which will continue to grow. You touch upon in the report about friendly immigration policies as well, which will make it a lot more attractive for start-ups outside of Canada to launch there. Our head of Europe, Dylan, recently wrote a blog about the EU and their tricky border restrictions, which makes it actually really difficult for start-ups to launch there. How are your immigration policies more assessable? Courtney, maybe this is one for you since you’ve worked with so many start-ups directly.

Courtney

Canada has made a commitment to bring 400,000 immigrants a year from between 2021 to 2023. So that’s their target we, I don’t think we need to get into the policy specifically, but if you look at some of the other countries, the US for sure, it’s just a different environment. So I think that in Canada, it’s a lot easier to bring in great talent. Canada is looking for great talent from all around the world to reside here, one of our partners is invested in a company called MobSquad and they’re in the space and helping to helping us companies and others hire great talent, and it’s just a different environment here because the country is looking for immigration. We need it, it’s a big part of our growth. I think that’s something that’s missing right now and everyone’s quite eager to be able to open the borders back up and welcome people. So immigration is always tricky and in every country it’s not easy, but Canada is actively looking to bring in talent and hopefully trying to make it as easy as possible.

Louisa

I think you’ve both mentioned talent just now and in your introduction, I think Canada is one of the most educated countries in the OECD. Talking from a LMRE’s personal experience so far of Canada, it’s been pretty impressive. So if I’m comparing some candidates in the US market to talent based in Canada, in the US a Head of Sales or President would be very much focused in the US market, but Canada is doing that’s the role based in Canada. Not only do they know the Canadian market, they also know the US market because they can’t just rely on business in Canada. We just find most of these candidates understand much larger demographics, new buying personas, characteristic, and an ability to work across two different cultures. We’ve also seen that Canadian salaries are significantly lower than US salaries, at least 30% lower in places like Montreal. I’m not quite sure why that is. Maybe it will change with more VC money coming to Canada. It’s easy to operate a remote workforce now, I don’t know if you guys have any thoughts and what you’ve seen in terms of talent?

Courtney

Yes, it’s interesting because I do think that the US dollar goes farther here, and that alone makes a difference. But in terms of the competitiveness, I think it is changing. We have a lot of our companies that we work with, it’s challenging to find talent. You’ve got companies Shopify and Google and others that have opened up here. So there’s incredible talent, but it’s still a competitive market. And so I think that it’s growing, and what’s nice is that I think CBRE called it the largest tech hub in North America. You talked about how it’s a highly educated population, fast growing city, lots of people coming here. So I think the talent ecosystem is continuing to grow. So it depends on what cities you compare it to. But I would say that great talent anywhere they are in the world, they have lots of options.

Julia

Yes, I was just also going to add on the immigration point that we talked before. So a lot of the talent that we have is kind of renewed on a yearly basis, so I think that that also probably plays a factor in the lower salaries that you probably see here just from the immigrant base that does come and starts presiding in Canada.

Louisa

I think also a lot of students at Universities. I recently did one with UCLA that were all asking about, can we give remote working? And I’ve spoken to some Canadian candidates from top universities and they are all asking for it. So if I was a start-up founder and I’m looking at my budget or head count, it does probably make sense to definitely go over to Canada and start recruiting there, as long as you’re in the city at the right time zone, it’s all doable. Now I briefly mentioned VC’s earlier, in the report you analysed something like three hundred PropTech start-ups, SONDAR, EKB. Who are the biggest companies and where are you seeing the funding coming from? Who were the top investors? Courtney, this might be one for you.

Courtney

So the way we broke it down in the report was based on companies that focus on PropTech. So at a Alate, that’s what we focus on, real estate and construction technology across North America. Green Soil has a similar focus as well as Brown Break Ventures, which was founded in association with Hopewell. And so I’d say those are the three biggest that are focused on PropTech specifically. But then there’s quite a range like Anovia, Real Ventures, Ganache. They all invest in, I think they were the top three generalist VCs that invest in PropTech. And then of course you have Mars and BDC and others that support a significant amount of start-ups and also are heavy weighted in real estate technology company. So I would say those are the largest, but if you look at the page we highlighted as many as we could, but there are still many more. We also highlighted some of the US investors that are focused on Canada. So Brick and Mortar, Metaprop, Second Century Ventures, they are some of the most active in Canada along with SOSV, FJ Labs. And these are just the ones that have made investments. I know I’m already that there’s many more that have their eyes on Canada and we’re talking to Canadian companies and probably have made investments that aren’t announced yet, or that aren’t public.

Louisa

And how many of them are PropTech focused? Obviously Reach, Metaprop, Brick and Mortar, they all are, are there any general investment funds looking to come into Canada who are generalists?

Courtney

So, FJ Labs and Muckerlabs invest early stage and they’re both generalists as well as SOSV.

Louisa

And then moving into section two of the report, going into a little bit more about the traditional real estate players like Oxford Properties, Avison Young, Dream, which Courtney used to work at. I’d love to hear a little bit more about the approaches their taking when it comes down to PropTech.

I interviewed John from Avison Young and they look at internal innovation, tech partnerships, acquisitions. Can you talk us through a few strategies you’ve seen and you went through in the report?

Courtney

Yes, absolutely. It’s quite interesting, so I thought it was interesting both Oxford and Avison Young both talked about data as a core part of their strategy and really wanting to differentiate through advanced analytics and data science and focus on partnerships with other start-ups. Oxford and Dean has talked about how it’s really about operations and so that’s his core focus, is how he can use technology to help get the highest and best use of their people’s time. And so he’s dedicated to working with global SaaS companies that can service their global portfolio. And he believes that they don’t need to be writing code and they can find partners that have cloud-based SaaS platforms to work with. And then Avison Young, John’s background, as your listeners know from the podcast is very focused on data and how they can integrate the data that they have internally, as well as all of the other real estate and real estate adjacent data sources that they can put together into Avant which they recently launched. And I think it’s interesting because his perspective is so clear in the quote that we concluded that he’s says technology just takes time, money, and vision, the data is the hard part. It’s really focused on data and creating that data as an enabler for the future.

And then Dream and Matt and me share some different views. Dream is very focused on their new impact vehicles, so they just launched the first public Canadian impact vehicle. And they’re really focused on how do they make their real estate more accessible, inclusive, and sustainable. And that’s a theme that we hear from every real estate leader that I speak to and you see it every single day. And the news releases that are getting that are getting shared around net zero goals and just general commitments, CSG, I’m sure Louisa you hear the same and I’m sure you’re hiring for those roles.

Louisa

Yes we’re definitely seeing new roles, new teams being formed in these businesses and there seems to be a lot more of these businesses finally get sign off to make these big hires, which are very costly to business. This is the costing them a couple of million extra to put five people in place as Heads of Digitalisation, IoT Consultants, Data Scientists, like you said, data is bloody everything and almost every businesses biggest problem, but could be the most powerful thing they actually own. So we’re seeing lot of movement in head count and hiring from different industries help people transform. We could start moving on to section three of the report, you talk about three main trends. So trend one being Canada has a growth in tech and PropTech ecosystem, trend two global PropTech start-ups are building footprint in Canada, trend three start-ups bringing successful business models to Canada. Do both of you want to talk the audience through and elaborate a bit more of these trends.

Julia

So I think trend number one, we kind of touched upon it in the beginning of the conversation, but definitely growing tech and product ecosystem in Canada. So again, from the combination of talent and the funding and support vehicles, and also the intersection of that with customers, in the same similar location. So diving into a little bit of the support systems that might be interesting to your audience. As I mentioned before, there’s quite a few venture studios that are now focused on building companies internally and testing out these MVPs out to the market. So Our Lab is an example of that. They’ve kind of created a company called Our House, which does prefabricated laneway suites and mass timber avenue town homes. So we’re seeing a lot of innovation come from the venture studio world. The accelerators, the Colliers prop tech accelerator powered by TechStars is still a big one, but there’s also Reach Canada who’s launched one. We also have a few others that, that are up and coming, but we’re seeing a lot of companies basically spin out of those and get accelerated. And in terms of the government policies one good example would be the Canadian mortgage and housing corporation, so that’s CMHC. They’re on a mission to make housing more affordable for everyone in Canada by 2030, and just launched a massive housing supply challenge. So basically investing $300 million in funding over five years to just collaborate with citizens, stakeholders, and other companies to develop innovative solutions.

So definitely I think there’s more money and more excitement around the PropTech field in Canada. And that’s super exciting and this kind of connects also with trend two, which is really global companies coming into Canada and opening an office in Canada, and Louisa I think you probably have seen a lot of this yourself, but there’s tons of folks that are making Canada kind of their second home. They are big PropTech companies like VTS for example, as well as fast growing ones like On-site IQ and Skylight. So this has been starting I’d say since 2019, and we just continue to see this grow. And again, it’s due to the competitive Canadian edge, if I might call it that, but basically that friendly environment for doing business, the highly educated workforce, a favourable exchange rate, and just this diversity of talent that just I think at the end of the day really does lead to better business building.

Courtney

And a big shout out to our friends at Toronto Global, who have helped us understand this trend a bit better and really work with a number of companies from across the world who want to locate in the GTA. Which as you saw in the report is nearly 50% of where of the companies are located here. Montreal and Vancouver are also thriving tech hubs depending on what specialty you’re looking for, especially AI or others, Toronto and Montreal, there’s lots of great places to locate. But it’s interesting to see companies come here. And I think what’s most interesting is these are companies that have an office here. There’s many others that that do as well, I would say most PropTech start-ups have somebody whether they’re located in Canada or the US that covers Canada and spends a lot of time here because the real estate ecosystem, we kind of punch above our weight and just have so many large real estate companies that are located or are headquartered in Canada.

Louisa

For our audience for when they want to download this report now it is officially live, how do they do that?

Courtney

So they can go to www.proptechcollective.com and there’s banner or www.proptechcollective.com/report

Louisa

Awesome. And to round this podcast up, what’s the best way for the audience to connect with you both. And are there any little bits of information or advice you’d to share with the audience?

Julia

Feel free to reach out to me, I’m on Twitter. So my last name it’s a Romanian last name so sorry for the spelling, but Chelaru. And then also on LinkedIn. So I’m happy to chat and also see how we can collaborate. In terms of a short little recap, I really do want to basically point to the fact that from the start-up perspective Canada can be a second home for everyone and there’s definitely this massive influx of funding and excitement around PropTech and it’s organisations like ours for example, that are here to support them. So I would really encourage them to download the report, read more about what we’re doing and just reach out if we can help them on their journey as well.

Courtney

Yes, I echo all of that. And I would encourage everyone to download the report, take a look at some of the great companies that are based in Canada, we bought a number of companies and names that you would know, companies Sonder and Properly and Breather, Bridget, Lane, Jobber. Lots of just incredible PropTech companies that are based here, I didn’t realise there’s a number of construction marketplaces that are solving last mile logistics for construction, like Go4, Toolbox, Dozer. So I discovered a lot of companies doing this research and I hope other people do as well. And I hope people will also reach out and tell us what companies we missed or what companies we should include for next year. So take, look and reach out to us at PropTech Collective. And if you’re in a space, also reach out to me personally, you can find me on LinkedIn or anywhere else.

Louisa

Awesome. Well look, once again congratulations, ladies. Also shout out to Alice who’s another one of the authors. Definitely big thank-you to Alice for pulling it together as well. And I’m really looking forward to seeing what’s next to come for PropTech Canada and also the PropTech Collective.

Both

Thanks so much.

Louisa

Thank you for joining us this week on the Propcast and a big thanks to our special guests. Make sure you visit our website www.lmre.co.uk where you can subscribe to our show. Or you’ll find us on iTunes and Spotify were all good content is found. While you’re at it if you found value in the show, we’d appreciate if you could rate and review us on iTunes or if you could simply spread the word. Be sure to tune in next Tuesday, and I’ll catch you later.