Start-ups aiming to bring a new product, service or business model to an existing industry often face a backlash from existing players, who have long benefited from a less competitive environment. This is particularly true in Proptech, which includes technological innovations in real estate. A few notable players have shaken the status-quo and consequently, evoked aggressive responses from established players. The following article will provide an overview of the successes of European Proptech disruptors.
Matera
Matera (formerly called Illicopro) is a French start-up founded in 2017 by ESCP alumnus Raphael di Meglio, which has developed a digital platform enabling property management. As of now, property management in co-owned properties is performed by one of a limited number of “Syndic de copropriété” (or co-ownership trustees) in exchange for a material fee. Their services range from administrative tasks related to shared areas of an apartment building to elevator or leak repairs. However, this process seems largely unsatisfactory as an estimated 60% to 70% of French owners complain because of the lack of communication and tracking of repairs, the slow handling of issues and the expensive service.
Matera’s response has been to provide a digital platform to manage existing “Syndic de copropriété” and offer administrative, technical, legal and accounting advice, enabling more transparency, direct contact with experts in the field and savings over existing property management companies (property owners can save 30% according to Matera). The launch of their platform was accompanied by an aggressive advertising campaign teasing the existing property management companies.
As a result, up to 3 lawsuits have been filed against Matera by companies in the sector, so far all dismissed by the commercial court of France apart from a symbolic fine of €70,000; establishing Matera as the main disruptive force in Proptech. Indeed, it has raised €35m in June 2021 with the objective of having under administration 1% of the French market of co-owned properties and of accelerating international expansion.
Homeland
Driven by the same objective to tackle the inefficacy of property management companies, Homeland is taking a different approach as it wants to replace legacy players with a hybrid model mixing traditional property management and digitalization.
Homeland digitalizes all exchanges including historical paperwork to provide real-time tracking of the property, a 24/7 emergency response line and cost and energy savings. Indeed, it is taking a proactive approach to environmental-friendly works with an estimated 20 tons of CO2 saved thanks to an optimisation of the 400 properties it has under management. Homeland has raised €9m to date thanks to a Series B round in March 2022.
WeMaintain
WeMaintain is a French start-up founded in 2017, which is a provider of technology-enabled elevator and buildings maintenance services. Elevator repair and maintenance is a very attractive market worth €100bn globally but dominated by the 4 major elevator companies (namely Kone, Schindler, Otis and Thyssenkrupp). It presents long-term secured maintenance contracts, with growing revenue thanks to increased urbanisation and a demonstrated resilience to economic downturn as regular maintenance is mandatory under many regulations.
There are a few things that set WeMaintain apart. First, WeMaintain assigns technicians to specific properties, allowing them to work as independents and for better salaries (on average €100,000 per year depending on performance), which gives them greater ownership of their work thanks to their ability to directly interact with customers. Then, WeMaintain leverages data to improve operational efficiency, effectively source replacement parts and reduce failure rates by 70%, overall improving user satisfaction.
In 2020, WeMaintain launched its IoT solution with a connected sensor deployed on top of elevators to further optimize maintenance and later acquired Shokly, another start-up specialized in fire safety maintenance. It has raised more than €38m, with sales exceeding €15m in 2021 and has already launched its activities in Singapore.
Demand Logic
Along the same ambition of improving building efficiency comes Demand Logic, a UK start-up, taking facility management to the next level. Through the use of IoT and the industry experience of its founders, Demand Logic promises 10%-30% energy and emissions savings and improved maintenance response by 30%.
For instance, devices like air conditioning, boilers or ventilation are equipped with sensors collecting thousands of datapoints per day. Demand Logic have developed a special device which is able to pool those large volumes of data, to visualize the consumption and any anomalies and thus to improve the understanding of the building.
Concluding thoughts
While Proptech is not necessarily the sector associated with the most disruptive innovations, many new players are using the capabilities of IoT, data analytics or digitalization to create value for consumers or to improve the sustainability of real estate. The property market is one of the world’s most attractive asset classes valued at $10.5trn in 2020. As such, it is with little surprise that new players are coming in and threatening to transform old models. With funding increasing 5x in Europe in the last five years, it remains to be seen how far start-ups such as Matera and WeMaintain will go.
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