WHAT’S NEXT FOR PROPTECH IN 2023?
Shajai Jacob, MD & Country Head, ANAROCK Group Business Services (ApnaComplex & ANACITY) began the discussion saying, “In 2016 there were two Proptech Companies in India and now there are 1,400 and these are just recognised numbers and of which only 36 % of the Proptech companies have been funded which means there is a huge scope of investments in this sector. However, only 13% of the Proptech relates to homes, though 84% of the Indian real-estate is residential. " Shivani Karia Jhaveri, Co-Founder & CMO, Blox agreed, “When you say Kal, Aaj aur Kal - history is a cycle, it repeats itself. Proptech started with aggregate platforms, adopted b2c approach on the way and has ended with transactions owning the whole value chain of real-estate. All of us are trying to create solutions that can benefit the end user - the customer and the developers.” Milind Changani, Co-Founder - Stallion Buildtech LLP and Partner CY CORP added, "For instance, ours is a platform built on the vertical stack incorporating construction management, sales management, permission management and everything that is linked to the real-estate business. The platform is intuitive and easy to use that builds on the environment and enables the end users.” Garima Bharadwaj, Co-Founder, Enlite shared, “Urbanization is growing at a fast pace and Proptech is trying to build solutions around it. With more buildings coming up one thing which sets in is inefficiencies and wastages due to lack of affordable technologies Enlite has built a world’s first wireless building management system which is an interplay of hardware and software, bringing building efficiencies at a low cost.” Aryaman Vir, Founder and CEO, MYRE Capital stated his own experience, “Majority of investment has been happening in residential real estate though commercial realty gives better returns, mainly due to high entry point. We brought curated and structured opportunities to much larger retail investor base, acting as fund managers to ensure that the asset performs. We offer fractional ownership of commercial buildings bringing cash flows for the developers and on the other end also provide finance to co-working space providers.” Shajai Jacob added that indeed technology is changing the face of real estate. “Given the experience of the Proptech entrepreneurs, we are seeing a speedy adoption of Fintech and real estate becoming similar to e-commerce in near future,” he said. CHALLENGES OF SCALING UP As per Shajai Jacob there has been a lot of investor’s interest in Prop-tech, Fin-tech, Mar-tech and Con-tech but the lack of scalability of many solutions is holding back the investors. Milind Changani stated that for any Proptech solution to scale it has to start catering to masses. “Once you go directly to the end consumers the solutions will lead to huge customer flow and investors’ confidence will come in.” Garima Bharadwaj added, “Most Proptech companies are addressing specific problems for specific set of users. Scale comes when broader problems are addressed which also needs high capital to create a solution. Real-estate is a long term game for even the real-estate to appreciate and value that for any solution to scale it’s going to take a long time. There is a waiting period but the returns are unbound in that case.” Aryaman Vir said, “Investors interest is a function of what they can see. D2C is the flavour of the season as they can see the proof of concept and the general direction. There is no dearth of capital, it’s the Proptech companies that need to show the value.” Shivani Karia Jhaveri concurred. “If the company that fulfils the criteria what the investors are looking for in terms of scale and cost effectiveness of scaling and you are able to give it to them, I think investors are around.” “Most developers are deterred by the cost of tech systems. However, the realization is dawning that if they do not adopt technology, they will be left behind.” Milind Changani “Given the real estate is one of the highest contributor to GDP, its technological progress is definitely going to be the largest revolution in India.” Shivani Karia Jhaveri “Real estate is a trillion-dollar industry with 1% expenditure on R&D. If you don’t spend on tech, you will get stagnant as an industry.” Garima Bharadwaj “For real-estate stakeholders, it’s important to understand the cost saving, Proptech is bringing to drive business efficiency and profitability.” Aryaman Vir “Proptech is here to stay and grow. We are seeing the end of the tunnel in terms of awareness among the real estate sector with rising interest of the players.” Shajai Jacob