OPPORTUNITIES AND PITFALLS OF INVESTING IN PROPTECH
Govind Rai, Co-Founder & Managing Director, Insomniacs initiated the dialogue mentioning that a lot of real estate companies are traditional but are leveraging the technology now but are looking at a differentiating factor when identifying the right fit. Aditya Jhaveri, Founder & CEO, Blox agreed and gave an example of his own tech solution, “Many platforms have done search and discovery and they can only monetise by selling leads. They are not able to do large scale brokerage. We are the first platform to create the multi-stake holder usability on a single transaction use.” Binitha Dalal, Founder and Managing Partner, Mt. K Kapital added, “At CREDAI, we are providing umbrella of solutions under one roof, from venture capitalists to 13,000 developers across the country. We mentor, share inputs for the right product development and also give you a testing board. The best way to work with competition is to come up with your differentiator. This is how we plan to do it.” Ramashrya Yadav, Founder & CEO, Integrow Asset Management stated, “For real-estate there is no single specific platform which focuses on the needs of real-estate developers. We already have one fund in place which is the last mile funding and two more in pipeline, for co-living and commercial office space. Also, we are integrating services, technology and capital.” Rohit Rajput, Former CEO, Max Asset Services, Max Estates talking of climate-tech said, “Looking at the large macro trend, one needs patient capital. Look at how to mitigate the risks and adapt. The right kind of capital will flow. For Proptech, since 2016 across multiple geographies it had great enthusiasm from non-strategic investors, but many start-ups were not scalable.” Vivek Agarwal, Co-Founder & CTO - Square Yards shared, “In transactions space there are two opportunities. Firstly digitization of developer’s inventory. But, the developers don’t want to declare how much unsold inventory they have. Second is the resale market, which is almost 2-3 times of the primary market. This space largely run by independent brokers can become organized with technology to support it. These are the problems waiting to be solved.” WORD OF ADVICE Ramashrya Yadav is of the view that most of the start-ups today have capability and agility but are clueless when it comes economy of scale. “Having one product, one solution is not going to help. So, create an eco-system.” Aditya Jhaveri added “The investor approach is either you are a legacy or you are massively disruptive. Also, there is a perception that Proptech can’t scale but quoting Warren Buffet ‘If you really build value money is going to pour in.” Vivek Agarwal stated, “When the company founders hold the majority stake, they are not riding a tiger for growth. The company can run at its own pace and take own decisions. However, an investor can help bring growth and profitability, which becomes difficult to balance in the former scenario.” Rohit Rajput expressed, “The Proptech eco-systems has a great multiplier effect. A large part of eco-system is non-commercial enterprise and that can become a distraction or a palliative to the business.” Binitha Dalal added, “Most Proptech founders are irrationally passionate about what they want and what they believe in. They don’t have the ability to take the feedback, which is actually telling them to look at things differently so that their idea can make money.” Govind Rai noted, "Out of the 51 companies which are unicorns, two companies are from the Proptech eco-system. But the paradox is that in the last one decade the money that has come in the Proptech is nothing compared to ed-tech or fashion-tech or e-commerce.” Funding is not a problem for Proptech, the challenge is of creating a market for that idea. Companies have to mature to that level. Govind Rai The real sustainability is not valuation, make the customer dependant on the technology and build an eco-system of related tech solutions. Ramashrya Yadav Proptech firms have to build year on year, compound the value and scale the business with strategic understanding. Rohit Rajput If you are pursuing a $5-10 bn vision, don’t worry about losing. It’s important to know your path and be in-sync with the investors to succeed. Aditya Jhaveri Most of the start-ups today don’t have the reach in terms of mentorship, we are creating a partnership of real-estate sector with VC fund. Binitha Dalal There is a huge opportunity which can make real-estate parallel to e-commerce where each player digitises their whole inventory. Vivek Agarwal
Tags : Opportunities investing Proptech eco-system explore segment