Last month’s fintech mega-deal was impossible to miss.
Seeing the US-listed Square drop a staggering $39 billion to acquire homegrown, buy now, pay later pioneer Afterpay revealed just how white hot the market has become, for technology that streamlines, digitises and disrupts the traditional financial services sector.
Fintech currently accounts for a whopping 20 per cent of venture capital investment locally and globally, as nimble digital players seek to overturn the old order and carve out profitable niches for their platforms and products.
Why aren’t we seeing the same phenomenon over in the proptech space?
To date, software and solutions that disrupt the way real estate is constructed, acquired, managed and divested haven’t captured the same headlines or investor interest.
That’s likely to change and quickly too. Consider this: commercial property is the world’s largest asset class, with an estimated value of $US31 trillion. The sector has lagged behind many others when it comes to adopting high tech tools and technologies. Back of envelope deals still abound and spreadsheets remain in widespread use.
But for how long?
As a new generation of digital savvy professionals move into progressively more senior roles, property businesses are beginning to realise the competitive advantages than can accrue from technology that allows them to take a data driven approach.
We see big opportunities ahead for developers whose software allows commercial property owners to manage their holdings more efficiently, from a financial as well as an operational perspective. Because, when you boil it down, real estate is no different from any other asset class. It represents an income stream for its owners and their primary focus is on maximising their return on the funds they’ve invested.
Proptech that meets this need and provides investors with greater insight could open the market up to small timers who’ve historically been unable to play in the major league alongside institutions, funds, trusts and family offices.
A proptech equivalent of Afterpay might make it possible for them to do so.
It will be a win if that happens but not just for the mums and dads and micro-investors. Venture capitalists and angel investors who’ve taken a punt on the technology that’s overturning the status quo will be sitting pretty too.
As a proptech pioneer whose cloud platform is already the tool of choice for many leading real estate businesses, we look forward to seeing our sector enjoy its time in the sun.
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