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Relevation 2021 – The Digital Fundraising Summit in PropTech with Idriss Goossens, Travis Connors, Alain Waha and Alexandra Nicoletti

19.5.21

In this episode the Propcast talks Idriss Goossens from PropTech Lab, Alain Waha from Cogital, Alexandra Nicoletti from Camber Creek and Travis Connors from Building Ventures about Relevation 2021, the leading digital fundraising summit for Proptechs, and about the changing landscapes of VC.

Click here to listen to this episode, and check out this preview of our chat below!

 

The Propcast by Louisa Dickins, Co-Founder of LMREthe leading Global PropTech recruiter, is brought to you in partnership with CREtech and ReimTech. This show will focus on connecting the PropTechs, real estate funds and VC’s globally…and get everyone talking about innovation of the build to rent environment.

 

About Guests

Idriss Goossens

https://www.linkedin.com/in/idrissgoossens/

Idriss Goossen’s is the founder of PropTech Lab (Belgium),  PropTech Lab are the Belgium community of innovators in the real estate value chain. Their mission is to foster innovations in construction and real estate and to ease digital transformation of the industry. PropTech Lab help to connect and relate companies, start-ups and investors, in order to underline the new trends of the market, to promote industry advancements, to contribute influencing and educating the market, and to foster collaboration and innovation in the Belgian Real Estate community. Idriss is also the founder of Relevation, which is the Global Digital Fundraising Summit for PropTech. This event aims to facilitate matchmakings between start-ups in fundraising process, and investors ready to invest

Travis Connors

https://buildingventures.com/travis-connors/

Travis Connors is the co-founder of Building Ventures where he co-leads the Investment Committee. Building Ventures invests in companies that are reshaping the way the built environment is designed operated and experienced. Building Ventures partner with visionary entrepreneurs who will have a profound effect on how and where we live as humans on our planet. Travis currently manages the firm’s involvement with Smartvid.io as a member of the Board of Directors. In addition, he works closely with the teams at Blokable, Dandelion, Join Digital  and Measurabl. Travis is a New England native having attended Connecticut College and earned his M.B.A. from Columbia University. 

Alain Waha

https://www.linkedin.com/in/alainwaha/?originalSubdomain=uk

Alain Waha is the co-founder of Cogital and leads Ventures and Digital Strategy services. Cogital are an international Digital Transformation Agency for the Built-Asset Environment.  They work with owners, consultants, contractors and ventures to guide and support their digital transformation journey. Alain began his career started in aerospace and automotive, deploying new business models and information systems. He later transferred to the construction industry in 2008 as CEO of Atlas industries, then CEO and founder of a further 2 start-up in BIM and Digital services. Alain also sits on advisory boards for VC funds, #contech and #protech start-ups, and is the co-founder of the Process Innovation Forum.

Alexandra Nicoletti

https://www.linkedin.com/in/alexandra-nicoletti-a205ab11/

Alexandra Nicoletti is Senior Associate at Camber Creek, with over 10 years of transaction experience in real estate, investment banking and private equity. Camber Creek is a venture capital firm providing strategic value and capital to operating technology companies focused on the real estate market. Alexandra earned her bachelor’s degree at Duke University and went on to work at Goldman Sachs, Apollo Global Management and Norges Bank, where she has managed commercial real estate portfolios totalling over $10 billion in value.

Resources Referenced

LMRE website www.lmre.co.uk

UKPA website www.ukpa.com

Relevation www.relevation.org

PropTech Lab www.proptechlab.be

Building Ventures www.buildingventures.com

Camber Creek www.cambercreek.com

Cogital www.cogital.tech

Insights From This Episode

  • We’re also seeing a lot more real estate to strategics coming into this space, and having a greater desire to participate in the in the ecosystem, both from an adoption standpoint but also from a direct investment standpoint– Alexandra Nicoletti
  • Do you want to have the support from generalistic VC? Do you want to have the support from more specific and more personalized, or specialized VC? So it’s a big question you have to ask yourself as founder– Idriss Goossens
  • COVID certainly up ended everyone’s thoughts around what we needed space for what spaces we needed. But the simple reality is we still spend 95% of our time indoors. And now we have more choices about where that’s going to be– Travis Connors
  • At the beginning, I think bottom up wins. But then over time, expanding and putting a fundamental structural shift into the market means that Europe becomes potentially more attractive because you can you find a more structured environment where you can sell, iterate, and then scaleAlain Waha
  • The volumes of capital that are deployed in the PropTech space according to our data are really growing almost 100%, year after year –Idriss Goossens

Episode Transcript

Louisa

Hi everyone and welcome to the Propcast, my name is Louisa Dickins, co-founder of LMRE and board director of the UKPA, and I shall be your weekly host. Each week for 30 minutes, we will be connecting the VCs, PropTech start-ups and real estate professionals globally, and assist in bridging that famous communication gap we all love talking about. So, sit back, relax and enjoy the show.

Hi everyone, and welcome to the Propcast, today’s episode is going to be slightly different to the other ones you’ve listened to on the other season, so it’s a bonus episode but we’re also joined by more than one guest to talk with the founding of Relevation, which is the leading digital fundraising summit for Proptechs, and we’ll also be talking through the changing landscape of VC. So I’d like to welcome Idriss Goossens, the founder of Relevation, PropTech Lab, and the European PropTech Association, but also to our special guests who are joining us today from the US and also the UK. They’re fairly well known names in the VC space globally so without further ado I’d like to welcome Alain Waha, who is co founder of Cogital and Leads Ventures and digital strategy services. Also Travis Connors, co founder of Building Ventures, and last but not least Alexandra Nicoletti from Camber Creek. Now, usually I would go through everyone’s bios but rather than listening to me speak for the next 10 minutes, I thought we’d get straight into the questions and let our guests tell you how they actually got into this space and a little bit about themselves. So Idriss why don’t we start you off, you’re the glue to this, so talk us through how you got into PropTech and about how you got to where you are now?

Idriss

Sure, well first of all thanks a lot for the invitation. When I got to PropTech, it’s already about 10 years ago, I actually started my career in that space before the word PropTech even existed. And so I worked in three different public companies with the important role and then finally, so about four years ago, almost five now, we were in a unique momentum of innovation and of digitization in construction and real estate. And so I decided to create PropTech Lab in Belgium as the real estate innovators community. So the mission of PropTech Lab is really to foster innovations in construction in real estate. So we typically help start-ups raising capital, we accelerate them and we also advise large construction and real estate firms on their innovation strategy on their vision for the future.

So today it represents 175 company members and grows at the speed of 10% per month. But I realized, in fact three years ago that in Europe you have 24 national PropTech networks of tech hubs. And so it’s a very rich ecosystem and each of these networks have the same mission, which is to increase the innovation, maturity of their local construction and real estate ecosystem. But they focus within their home markets and so that creates a very fragmented ecosystem. And so I decided to co found the European PropTech Association as the pan-European umbrella to coordinate with the 24 national networks, and to create the conditions that allow the creation of the first PropTech unicorn is based in Europe. And finally Relevation, but I might speak about that a bit later.

Louisa

Yes, we’ll definitely go into that in a moment. But thank you so much for that, now Travis to talk us through your journey. And big shout out here and Alexandra, because it’s super early for you, where are you based at the moment?

Travis

So I’m based in Boston, Massachusetts. I’ve been a venture capitalist for over 20 years now but my journey to PropTech started when my current co founder Jesse in Building Ventures and I invested in what would now be called an early Smart Cities company back in 2006. And Jesse had lived his whole life in the AC software world, he really woke me up to the opportunity that was here. And it kicked off a 10 year conversation of the impact that we could have if we brought digital tools and technology into the worlds of construction and real estate. Like Idriss we noticed in 2015, that the market was beginning to change the way that it thought about adopting technology. And that caused us to leave our respective firms and create building ventures as a platform for early stage companies to get the support they needed to drive innovation in the built environment.

Louisa

And now for Alexandra, you came from real estate banking into private equity, so not straight into VC, talk us through your journey as well.

Alexandra

Yes, so I took a perhaps unconventional path to VC. So my background as you mentioned is really in real estate. I spent a number of years across acquisitions and asset management roles with institutional commercial real estate investors and found myself talking about so many of the pain points that we are now talking about so frequently in PropTech. There’s a stat floating around that the average Fortune 500 companies has something like 40 different software solutions, and the average real estate company uses only a handful. And so I’m very excited to be part of Camber Creek to really shift that.

Louisa

Awesome, thank you for that. And finally Travis, you came from what I understand from outside sector from the automotive sector, but you’ve been involved in the digital transformation of the built environment for some time. Run us through your journey?

Travis

I think I’m the original geek, I just wanted to use technology and make it work. And so I started when computers were still the size of a house and we put them to work to try to solve problems. And initially, that was aerospace, that’s who could afford those beasts and make planes fly better. And then I transferred to the automotive industry and really that’s when digital transformation started. We realized that we weren’t into the making of cars or making of tires, we were in the mobility market. This was like mid 90s so already we understood that we could use technology to make the existing business work better. So making things go better, synchronizing supply chain, or engaging with customer, but then we realized we’re actually in the mobility business and that was that was societal. And so we started trying to servitise mobility and that’s where I left automotive in 2006. Private equity guys started asking me could I look at the company here, could I look a company there and I ended up in in the built environment, in the built world in 2007. And discovered that technology hadn’t yet arrived and that’s been my work now for the last 10/15 years, putting technology to work in the built environment

Louisa

Awesome. Thank you for that and thanks for sharing your journeys fairly briefly. We’ll get into a bit more about a few of your business investments or trends you guys have seen, whether it be in the US and across Europe, certain hotspots of activity. But before we do that Idriss, talk us through Relevation, who are you expecting to join? Obviously the guests on today’s podcast will be joining but how has it grown? Who do you want to be involved in it, what’s the whole mission of it and what does it really add to this PropTech community? Because from what I see, it’s the leading event in terms of joining Proptechs to the VCs, which is so important for the growth. So talk us through it a little bit more.

Idriss

Sure well I don’t want to do too commercial content so a story based on members. So when the pandemic started in March 2020, with the European Public Association, we were monitoring on a daily basis around 3000 public start-ups. So all the start-ups that are located in you in EU, including UK, and we saw that roughly 50% of all of the start-ups who could have liquidity issues in the next three months due to the pandemic. And so I decided to create a matchmaking events where start-ups, where founders willing to raise capital could engage with investors willing to invest. That was Revelation. And so it has been a great first addition, but it was still a very young company. And so I guess what is important to mention is really that Relevation is different from any kind of events that exist I think, because it’s what we call the transactional events. So it means that the purpose is really, it’s not an educational event, there are plenty of webinars and there is also this kind of zoom fatigue of digital events. But we are transactional events where the purpose is to facilitate matchmaking, to facilitate and allow the attendees to really create meaningful relations with the other attendees.

So it’s very important that really started as a digital events, but our ambition is to really become a reference in that very niche market, which is venture capital in the PropTech space. And so we want to contribute to bring more transparency, more efficiency in that industry. And also to maybe contribute to define the standards, because we saw that it’s an industry that is not super transparent in a way, and so we will produce a lot of reports for our attendees only like the valuation trends, the exit multiples, the fund performances or this kind of stuff which will be anonymized, of course. And finally, what is also exciting is that only seven months after the launch of the company, the US giants CREtech decided to invest in Relevation to fuel our global growth, and so this year you can expect 400 founders raising capital. And what is also exciting is that we will have 50 LPs willing to invest in PropTech funds, and also more than 100 what we call ‘high potentials’. So students graduated from the top 10 World Class universities including Oxford, Yale, Stanford, Barcelona, IE from Madrid, so top business schools, want to find a job in the PropTech space so we are organized also in partnership with LMRE. So this is what is on the menu for today”

Louisa

That’s a truly global event and platform and LMRE are supporting it, but looking forward to it and to connecting with everyone. Now, let’s talk a little bit more about the European and US VC landscapes. And we have the perfect opportunity now to talk about it, Travis maybe you can start us off, you’ve had 10 years in the making of understanding the landscape. Is there anything you’ve seen in terms of trends, you invested in the ESG space, is it measurable? What have you seen?

Travis

Yes, so our fundamental thesis when it comes to the real estate space, is that what consumers want is to consume space as a service. And the reality of that means that owners now need to operate what have historically been financial assets more like a business, which means to be far more attentive to the needs both of the occupants but also all of the stakeholders. And I think that’s kind of the underlying driver, the trend that what we want in our spaces is looks a lot more like hospitality. And what we require in the building operations looks a lot more like mission critical assets. And so all things like the sustainability performance, the indoor air quality that people are having, the way they use the space, the amount of friction there is to use space. COVID certainly up ended everyone’s thoughts around what we needed space for what spaces we needed. But the simple reality is we still spend 95% of our time indoors.

And now we have more choices about where that’s going to be. And so the imperative is that owners have to deliver delightful experiences that make spaces people want to be in, to make it the appropriate place for people to do things. And all of that is going to require while at the same time meeting new regulatory challenges. So I think that in many ways, Europe has been ahead of the US in some of these trends, particularly around sustainability, performance, and the modularization of construction and moving construction production. But overseeing all of those things fall in the US as well, which just drives an enormous amount of founder activity by which the capital follows, which is why you’ve seen so much money move into the space in the last few years. And just to give a shout out to Idriss in Relevation,  whether it was intentional or not, the timing is perfect. It feels like the kick-off event to our return to a more normal, greater velocity and looking at doing all these things.

Louisa

Yes, I agree with that, it’s perfect timing. And Travis, you mentioned about capital, from what I’m seeing there’s more larger investments in the US market compared to Europe, yet Europe is ahead in certain hot spots like ESG. Do you know why there’s more investments, is it higher amounts of money?

Travis

I think it’s two things. I think one, there’s the maturity – many of these companies got started early. I would say that the customers are further ahead in Europe, as far as start-ups may be further ahead in the US. A number of our companies have found resonance in their value proposition in Europe in some cases before they found it here. But in general, the European founder start-up market has been behind the US, it’s really come on fire in the last three or four years. But you need both those things to make it work. There’s a reason why we tend to have locuses of innovation and it’s the combination of founder energy plus capital working together. One of the wonderful things that I think about everyone having to rethink the way they work during the pandemic has been it has taken people out of the standard. We need to meet a founder 17 times before making investment, it’s easier to make investments locally, that you realize there’s a lot you can do to get to know people elsewhere. And that allows you to really scale, we tend to invest a very early stage and so we tend to like to be able to get to our teams within a day. But it’s made us think, during the pandemic made our first investment in Europe as a result of this, because we realize it’s no further away than it is to do a deal in California.

Louisa

Awesome. Are we allowed to know what that investment is?

Travis

It’s company called GoContractor, they’re based in Dublin. And it’s a platform for doing learning and training so that you can get workers to site more productively and not waste time on site doing training.

Louisa

Awesome, yes I’m starting to learn there’s a massive PropTech hub in Ireland, and Carol who runs the Irish PropTech Association, she’s wonderful and she’s got a great radio station. Yes, check her out if you haven’t those listening. Now, Alexandra are you seeing similar things in the US as well, since joining Camber Creek?

Alexandra

I’ll add on to Travis’s comment on the flexibility of space and just the increasing demand for that experience. I think as the employer, it’s really a question of how are you delivering a high quality experience for your employees and bridging that experience from their home office and into the workplace, and then as the landlord thinking about your building, it might be 100% leased but as people come in and out on certain days with that ongoing flexibility, how do you optimize building performance in a sustainable way to really meet that meet that changing demand? And I think a great example of that is, is we’re also an investor in Measurabl which Travis is as well, and they’re doing really great things helping property owners assess and mitigate environmental impact of their buildings.

Louisa

Yes. And be great to hear from you Alain, what have you seen in terms of in the UK? So you entered this space 2007/2010? Which is a hell of a lot earlier than other people in the VC space!

Alain

So yes, I think that there’s the very broad difference in terms of the VC ecosystem in Europe, and the VC ecosystem in America across all sector. But if we look at it more specifically to PropTech and ConTech, I think it’s an interesting comparison to understand that I think it’s driven by technology adoption, I think the energy of the founder that Travis mentioned, I think that energy needs to be there. And we’ve got some hubs in Europe, we’ve got Berlin, we’ve got London where you have that energy, but also you have to find good clients that you can scale up and good clients that give you interaction. And I think that’s where the US probably initially has a great had a really great head start. I think it’s a very entrepreneurial type of market driven economy. So people try things, they pilot, so as a founder you find you find a receptive audience. Similar in Australia, the Australian states they’ve got this very direct conversation, and you can do things bottom up. Europe is much more policy driven, either in the corporate or the ability to deviate in a French or Japanese companies.

So nobody pilots until there is a pilot structured program measurement system. And it’s in the same way you saw it in the UK was the policy driven approach to forcing them into the market. And I think those kind of thing, actually format the VC ecosystem or in terms of capital efficiency, being able to quickly iterate and establish product market fit. And I think at the beginning, I think bottom up wins. But then over time, expanding and putting a fundamental structural shift into the market means that Europe becomes potentially more attractive because you can you find a more structured environment where you can sell, iterate, and then scale and I think if the market has structurally changed you can scale, whereas if you just instilled that iteration, prototyping, testing like you have in the American market, then scaling becomes really capital intensive. I think for me, that would be the very fundamental difference between Europe and America. One is great to iterate early seed, early traction and then come to Europe to scale.

Idriss

If I can do a quick add on there and quote the chief economist of the European Commission who has been a great part of the European political Association since the since the very beginning. He’s saying that it’s also a difference in the culture of entrepreneurship, because in the US you really fail fast or succeed fast. While in Europe, you have this kind of more zombie culture, where you try to survive on the long run, and you keep doing stuff even if it doesn’t really work. So it’s also about this I think.

Alain

Definitely, and I think when we say fail fast, what really we’re saying is learn fast, learn what works and what doesn’t work. And so having a really efficient conversation with the market becomes really important to iterate fast. And if you’ve got awfully polite people that keep on welcoming you, but not telling you your product is rubbish, that’s not helpful. And I see that a lot in very polite Japanese culture. But equally the people that have iterated, but that don’t have the authority or process to allow you to scale, ultimately you get false market positives. I’ve piloted something where it’s never going to scale, there’s no use for venture capitalists either.

Louisa

And I guess looking at more generalist VCs, not just built environment or PropTech specialist VCs, Idriss are you seeing these larger global players entering the market? I’ve had a couple approach me to set up or hire one person to look at this space. Have you seen a growth in that?

Idriss

Oh, yes certainly. I think first generally speaking, we see that really the volumes of capital that are deployed in the PropTech space according to our data are really growing almost 100%, year after year, except last year which was a historical crisis. But we see more and more generalistic VCs willing to play a role as well in that specific vertical. So in Europe for instance, we of course see Partech Partners, who were involved last year at Relevation. But as well as the ID Invest, which are two larger VCs dedicating a part of their funds specifically to the PropTech vertical. So we see this more and more. But now the question is for founders, do they want to have this much money? Do you want to have the support from generalistic VC? Do you want to have the support from more specific and more personalized, or specialized VC? So it’s a big question you have to ask yourself as founder, who do you want to have as an investor? So I think it’s where we will see probably the biggest competition in the access to deals coming. So yes, that would be my take.

Travis

Alain touched on something really important, which is just understand the dynamics of the market into which you’re selling. And I think that’s where the combination, one of the things I really love about the PropTech investor scene is there are a lot of well informed firms whose LP bases come from the space and can really help companies early on navigate that when it isn’t just about money to scale, it’s about understanding the market dynamics. And then the fact that you’ve got your regular generalist firms now all looking at it. Fundamentally, you have a $11 trillion global industry like construction that has very thin margins, virtually untouched by technology, the opportunity to expand the profit pool there is huge. And so there’s a lot of opportunity for capital, if you understand it’s a highly fragmented, highly regulated, highly risk averse kind of industry that you need to transform and it isn’t going to be SoftBank writing a $2 billion check in the world changes in a week and a half. In real estate, you have the same thing of understanding those local dynamics of regulation, the way the firm’s are structured, the kind of capital stack that they have. And so I feel like it’s this really perfect opportunity where people were waking up to, it’s the world’s largest asset class, it can be transformed, we need to have exposure and investment there 24.24. There are lots of interesting founder energy going into it, where you have a number of firms that can help these companies get started. And then the capital, they need to really scale because it is a global opportunity, because we’re we’ve all lived in space everywhere.

Alain

Yes. I think it’s really interesting to take that and that dynamic of the market and understanding patient capital should be, if anything, I’ve got a sense that the VC world has become enamoured with these incredible scale up, hop in or what’s the latest one that went from nothing to everything in a matter of three weeks. This never was the game. The original game was silicon, the original game was quite patient capital, but immense opportunity around exponential technologies. And understanding that you are going to create and have the opportunity to really transform value, but it took time. building an Intel clock took time. And I think back here we are at the edge of making technology work in the largest ecosystem there is. And really happy Travis started with this idea of productization and servitisation of space, because the built environments where we live, that’s why I’m still here, after 50 years here, it’s incredibly important. And we’ve not been able to make technology really make a meaningful difference yet. So its going to take that original mindset of silicon technology, its going to be transformational, the, the opportunity is vast, now we’re going to need to iterate in a patient way, and make that scale, I think that’s what everybody’s feeling.

Alexandra

I would also add to that, and, and approaching it from a little bit of a bit of a second lens, we’re also seeing a lot more real estate to strategics coming into this space, and having a greater desire to participate in the in the ecosystem, both from an adoption standpoint but also from a direct investment standpoint. And I think this has been ever evolving over the past several years, but really seeing it starting to hit its stride now with how strategics are wanting to engage and participate and really be active at a very early stage, and how they’re been and how they’re involved in PropTech.

Louisa

Does anyone else want to add anything on to that?

Travis

Well, I’d just say having been investors in start up companies for a long time we’ve really observed that there are kind of four major things that can drive change in a marketplace, that can be the creation of a new technology, they can be the broad adoption of a technology that enables you to do things where you couldn’t before, it can be the regulatory framework changes that forces people to adopt. And then lastly, it may shift in belief where people start to think that doing something differently is the answer. And what we love about the built environment, prop tech in general is all four of those are converging now on this space, and it’s only been just pushed forward that much more aggressively, in the way that we’ve all really thought about space in a different way in the past 12 months. So I think that’s the reason why there is so much interest in and enthusiasm in market participation.

Alain

I was just going to hop in and say you we also have to be very mindful. We say it’s massive, but being so massive means that we probably need to be a little bit more specific. For me its easier if I’m telling you I’m going to Asia, you know I’m not in Europe, but you don’t know where I’m going, you don’t know what I’m eating tonight. I might be eating in Hyderabad, or am I being eating hot food in China, completely different thing. So as soon as you think about construction and the built environment, are you talking about canals? Or are you talking about building a residential tower? Are you talking about commercial real estates? Or are you talking about creating a transaction space which we call a shop, a brand experience? I think we’re going to see that the whole ecosystem is going to change by people reconsidering that.

Somehow we’ve talked about one thing called construction and it’s like pouring concrete. Nobody wanted to pour concrete, they wanted to create the retail shop or a stadium, two totally different things. And second, we’re going to be looking at it also much more about what was the outcome I was trying to get from that thing in the first place. I didn’t want a stadium, I wanted a fans, I wanted entertainment, I wanted home advantage, I wanted to put the show on . And then in that prospect, we created an arena and the concept of an arena, the fully circular one that was a breakthrough about 1000 BC. And then since then we haven’t really improved very much on it and so you’re saying so I don’t know the technology is  concrete, and the breakthrough design is the Roman times. Now we’re going to bring the next year integration of technology look at an arena and esport arena, look at hybridization of space and hybridization of experiences. We are going to see things that are really completely different, its going to be by sector because what I’ve just described doesn’t work for a train station, doesn’t work if I’m talking about, I need a power network to make sure that the city is still powered up. So I think it’s going to be very exciting space with the dynamics.

Idriss

And making sure that we speak all about the same standards is one of the missions that we want to achieve with Relevation. And so this is why also, we really try to emphasize on the fact that the scope of the event is any innovation, technological, technical business model across the complete value chain of construction, real estate, and across all the different real estate asset classes. And so people can really filter by asset class saying for instance, I’m very interested about PropTech and logistics because with pandemic in the boom of e commerce, I’m really thinking that there is a huge opportunity there. Or I’m particularly interested in PropTech and healthcare, because of course hospitals could be much more optimized for a commuters point of view, etc. So I’m agreeing with you Alain, I think actually that the punchline of the of the webinar is really that PropTech is like Asia.

Louisa

We’ve touched on there being a massive growth, the stat is something like $22 billion last year, COVID is increasing digitalization of the real estate industry. I’m sure you’ll have different stance and maybe different verticals growing whether it’s ESG, whether it’s Contech, digital twins, I don’t know, how do you see the level investments that are growing? Is it going to continue to be like 25% each year? Do you think it will get as adoption happens and It can be even higher growth? Or is it going to be into a completely different sector? And who would like to go first, it’s a fairly big question, but quite a nice general one for everyone to get their answer before we round off the podcast.

Travis

I’ll take a stab at it. So I wouldn’t want to predict the dollars but I’ll say this, as long as adoption continues to grow, dollars will flow and dollars will flow efficiently. We tend to look at the number of transactions more than we do the dollar. Now, the reality of birthing any start-up technology market space is it’s massively inefficient. And there’s a lot of money on the side-lines, and they will chase that and it will overfeed the system for sure. But I would say though, that I think that the market opportunity is big enough that we will continue to easily see 20/25% growth in the number of transactions that are happening for the foreseeable future, we’re still very early in this whole digital transformation of these two industries.

Louisa

Awesome. Well Alexandra, what are your thoughts on that?

Alexandra

Yes, I think very consistent with what we’ve been saying, I think it’s also going to be some somewhat vertical dependent. We haven’t really touched that much on single on the single family residential space but that’s a massive market and for a number of reasons, I’m seeing a lot of technology come into this space and a lot of dollars go there. And depending on the environment going forward, has different drivers relative to the commercial space. And now we’re seeing tons of investment on both sides. And the question how those two levers move relative to one another going forward. And that’s not to say it’s one versus the other, it depends on the focus of the capital and the expertise there.

Louisa

Thank you for that. And Alain what about you, what are your predictions? I’m sure you have a couple.

Alain

I’ll be the same as Travis, predicting would be dangerous, but suddenly what I’m looking at is this area with capital will work and the pump is going to work and accelerate. And I think for that you want slightly higher clock speeds of data and transactions, so that you get early market validation, and you can generate data that gives you the confidence to do more. So clearly there are some market segment. Alexandra mentioned single family housing, what’s great about that is that you’ve got lots being sold. And then if you can start saying, Oh, this works etc, now I certainly can see for example digitalising of construction. So moving from pure construction, through product based thinking of our manufacturing space, and manufacturing an outcome may even go as far as branded, and manufacturing single family house, definitely manufacturing office spaces that can be reconfigured differently. We see a lot of transaction leases out three years etc, seeing productization of other category like transaction space, we talked about retail. So I think that is very interesting.

And then historically I think what’s really interesting, coming back to what Travis was saying about you need capital to understand the sector, ultimately investing into property and it’s trying to provide return to the investor with the right level of risk. And the way they’ve done that historically is turn that cash into concrete. And then get it back through a transaction or through rental. What if the new way for the built environment making return as an investor in the built environment is actually thinking about actually I didn’t want the investment, I was providing an office, I was providing a transaction space. And if you if you do that, then suddenly it’s a win. AI s an investor understand the space and been focusing on the wrong thing, like the concrete, actually I should have been focusing on the thing that I can’t touch, which is the space. And technology allows me to do that and I get a lot of data, a good night’s sleep, my customers returning etc. So that clock speed of data very important by the same investor.

Louisa

Yes, I’m surprised we haven’t all mentioned the word data. I think it’s the first podcast we haven’t in five seasons! Idriss what about you? How have you seen the landscape evolving? There’s a huge amount of more investment going into Europe, lots of start-ups also going from the US to Europe, I’m seeing similar growth from APAC launching in the US and Europe. What’s your forecast?

Idriss

So I don’t have a crystal ball like anyone here, what I would say is that the US PropTech markets according to our data is around 2000 PropTech start-ups, and Europe represents 3123 according to a survey of the European PropTech Association. So it’s a very rich ecosystem, but if you focus on the European ecosystem and if you agree on the five categories that we use, invest finance, design bills, market transaction, management rates, and live and work to cover the end user experience, then you have to know that 50% or 60% actually of all of the public start-ups are either manager operated or market and transact.

So these two categories represents the vast majority of the PropTech start-ups. And probably, it’s in these two segments that we will see the consolidation happening first. So meaning when the space will be digitized and there will not be much space left for new solutions or new innovations, because it will be modernized. So this is the way we look at it. But what excites me is more the space that was a bit ignored by PropTech so far. So the alternative asset classes of real estate, for instance, maybe a space where we could see the next PropTech unicorn could be the rents to buy space. So in the in the middle between renting and apartments and owning an apartment where you can combine these two experiences without the disadvantages. So this is for me a very exciting space, but we’ll see. The conclusion is that it’s a very exciting space, where we will see a lot of unicorn and probably also it’s a space that will help us to live a better life in a way. Its a space that will improve our daily lives, the place where we live, the place where we work, the place where we commute, etc. So, yes, this is the way I look at it.

Louisa

Yes, I feel like everyone’s personally invested in it, but a lot of people don’t realize that. A lot of my friends don’t quite understand when I say built environment innovation, and I talk them through it and they say “Ah!”. But I think when people are out the sector, it’s just it’s bit of a learning curve but we’re getting there. Team we’re coming to the end of the podcast and how we finish it off is for the LMRE part. L is lessons learned, M is mention or give a shout out, R is any regrets in your career and E is what are you most excited about. Travis why don’t you start us with what’s one standout lesson you’ve learned in your career?

Travis

Yes, I think for us and what I’ve learned over the years is that the critical thing that we care about and spend a lot of time evaluating is founder market fit. Everybody was talking about the people and of course it’s about people, but it’s really about are the people are perfect for the market? Do they love the problem that they’re trying to solve enough that they will be relentless in their pursuit of it? And really, that’s the kind of key if I distil everything down into what we’re trying to do, it’s that. What was M? Mention a product or service? So I would just say we’re really excited about the portfolio we’ve put together with our first fund. And we’ve started to deploy our second fund now. You can find out more about all that on our website, which is just www.buildingventures.com. As far as regrets I don’t really believe much in regrets. I think that every everything kind of leads us to our next step. It was the investment I mentioned in the beginning that Jesse and I did back in 2006 wasn’t much of a financial success but it forged a partnership and a friendship that has now allowed me to dedicate my career to this space and work with Jesse on it. And it’s really been amazing and exciting.

I’m just excited for the attention that people have, I think that this year has made everyone look at and say, What space do I occupy and what’s it for? And back to what Idriss, Alain and Alex touched on, at the end of the day all of this stuff in PropTech and construction tech is about how do we provide and monetize a physical experience? Because that’s our reality. And that’s what all these solutions are trying to do and I think the attention that’s on it just means that there’s going to be that many more cool, interesting opportunities to work on.

Louisa

Yes, amen to that. Alexandra, what about you? Are you ready for the LMRE part?

Alexandra

So L for lessons, I would say really being a partner to everyone, not just your direct customers. I think being there to add value and support to folks just in the ecosystem I think comes around in a lot of a lot of ways and something that we value a lot, Mention, I’ll give a shout out to the rest of the Camber Creek team and our portfolio companies, you can learn more about them on our website. Regrets, I am with Travis on this one. I think hindsight is always 2020 but always good for learning opportunities. And then excited, what am I excited about everything! Just a big yes to that one.

Louisa

I love that. We should all be saying we’re super excited about Relevation, guys..! Alain, what about you for lessons learned?

Alain

Yes, I wasn’t going to focus so much on me and the lessons learned, I think live by your passion, that founder product market fit, I think is a really good insight. And I like to try to balance this is very good word of Bill Gates, we overestimate what we can do in three months, underestimate what we can do in three years. So how do you how do you get early feedback so that you’ve got a plan, you stick with your plan, but somehow de-risk it by iterating early? I think that would be what I’ve learned over time, and that’s why I’m still in the built environment. And mention, I think that’s really where I wanted to focus. I want to put it on the theme of those people that are trying to change the built environment and innovation, the list is very long start. I’ll start with Travis and his Building Venture investment network, we’ve got Mace in London trying to live it and show it and share it. I work with bureaus with the same 60 partners where saying let’s make a difference. Epic Games to give you one that is, how do we bring gaming technologies to the built environment, anybody that wants to make the market change for a better built world I think needs to be mentioned and celebrated. And sometimes from surprising places like the EU and the DigiPlace Initiative that says let’s make the third platform come from the EU, a very European values around the built environment, and let’s create an ecosystem for that. So I think they need a big shout out there at every level.

Regrets, as we say in French, yes, je ne regrette rien! What I’m excited about would be the opportunity of being the generation of founders and meeting the generation of founders that are going to make technology work in the built environment. I really feel that the built environment has not changed. If you think in terms of technology, the last technology was steel and remove steel from New York skyline and you’ve got a flat place, you can’t see New York. And then you add light and electricity, you remove electricity from the New York skyline, you still have a big dark thing it’s transformational. Then we’ve got silicon, the most powerful technology invented by man so far and there’s been no change. So that tells you that in the next 20/30 years, things are fundamentally going to be completely totally imaginably different. And that is exciting.

Louisa

Yes, I think Michael Beckerman at CREtech is always talking about the Hot Topic ends, reimagining real estate, how we see it now, how its operated now, it’s going to be completely different in five years. So that unknown I personally find super exciting and interesting. But Idriss last, definitely not least, let’s hear your lessons.

Idriss

Well, my lessons, I think my lessons is really know your values, your drive and what moves you. And so I listened to a very inspiring podcast called the Burnout Manifesto from Gabrielle Parisi-Amon, explaining that if you have this graph of your values and then your skills, you have what is life taking to you. So you go to work etc, and you have what is life giving, and so make sure that you’re in the life giving which is where you have your passion. So it’s not really important to have your skills there, because you can still learn but very important to know your values and your drivers I think. Next letter was M, I think I will mention you my dear Louisa, for organizing this podcast. Also, thanks to all the other participants who will of course be present at Relevation. But it’s a pleasure to have you and I think it was a great exchange and a great teaser of the day’s event. So thank you all for that.

The regrets? Actually, it’s not a regret link to my career or indirectly links, I would say maybe try to find the balance between private and professional life. And I think it’s the ultimate fight for everyone around the table here but it’s something that we should reflect on at least on my side. And what is exciting, I think maybe because I’m a positive thinker, but I think the PropTech will allow us to live a better life in a better planet. But at the same time, when I was listening to you I was also considering the fact that we should avoid to have generational fracture, technological fracture between the younger generation and younger people are not able to adopt technology. So I think we should also be careful about that. But long term probably PropTech will make us living a better planet so this would be my answers.

Louisa

Awesome. Thank you for that and to your point about finding the balance in private and professionals who have been working from home, but also being involved in the sector which is just growing and growing, it’s so hard to find that off switch. And now events are going to start cropping back up and I think we’re all going to start flying and maybe meeting each other in person who knows, I think it’s going to be even more difficult to do that. But thank you all for coming in and joining us on the Propcast, Idriss I can’t wait for your event it’s going to be amazing. I’ll be sharing all of our guests names, company website so check out their portfolio companies, look at what investments they do, if you’re a fan reach out to them. If you want to join Relevation you need to get in touch. We’ll be sharing all that information and yes, I guess thank you all and I’m looking forward to catching up with you all after the show. Thank you for joining us this week on the podcast 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 where all good content as 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 simply spread the word. I’ll catch you later.

 

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