Property technology (proptech) was once synonymous with real estate marketplaces, but the sector is undergoing rapid end-to-end change. Agents and developers are increasingly automating more and more parts of the buying, selling, and leasing processes, such as document signing, and the use of big data and artificial intelligence (AI) to value and even advertise properties. Some developers are even using augmented reality (AR) to give prospective homeowners and tenants a feel for a property before even ground-breaking on the building has begun.
Construction technology (contech), an adjacent sector to proptech, is experiencing similar rapid digitalisation. In short order, buildings are becoming smart, much like the individual units themselves. Developers are turning to internet-of-things (IoT) sensors to improve the efficiency of construction sites, design processes are being sped up with AI, machine learning, and computer vision, and construction is going increasingly green to not only lessen their environmental footprint but yield cost savings.
With proptech and contech in the midst of a major digital transformation, the latest Deal Fridays brought together promising property technology and construction technology (contech) startups and industry investors to support networking and deal making opportunities. The event was co-organised by Enterprise Singapore and Accelerating Asia.
From AI-driven video analytics for workplace safety to intelligent document and contract life-cycle management software for real estate, the event featured seven startups in proptech and contech, including ConcreteAI, Doxa, Invigilo, Lauretta, Operva AI, Real Estate Doc, and Showsuite.
The event is timely, given Proptech’s current drop in venture capital, which has slowed to US$1.69 billion in the first quarter of 2023, compared to US$7.44 and US$6.97 billion over the same period in 2022 and 2021Centre for Real Estate Technology & Innovation (CRETI). Proptech and contech need outlets for traditional venture capital instead of the alternative financing that has risen in its place, such as debt financing.
Despite this slowdown, Leon Yeo, the founder of Doxa, a fintech startup that streamlines procurement and collaboration workflows between construction stakeholders, is overall bullish on the industry, believing that certain tailwinds will work in their favour.
Over the last four years, the pandemic led to a rise in the cost of labour and materials. In order to improve their unit economics, companies had to exercise even stronger working capital management. According to Yeo, these tailwinds are a watershed moment: They can catalyse industry players to innovate.
“We see that currently there are still many construction companies not adopting technology, or embarking on digitalisation journey, because of concerns of their employees’ resistance to change,” said Yeo.
Yeo thinks that these pressures will lead to quicker adoption of innovative solutions, which will themselves pave the way for other value-added technologies to enter the space, creating a virtuous cycle for all industry stakeholders that will ultimately benefit end users like home buyers and office workers.
After all, PropTech and ConTech are essential drivers of transformation in the way we build, manage and interact with the built environment. The field shapes how developers and construction firms build, sell and lease buildings, and outfit them with new technologies for efficiency and cost savings. In turn, it shapes how we live and work.
“Another landscape change is the introduction of fintech – the increasing digitalisation of data creates the ability to embed financing into the built environment ecosystem. This allows more firms to tap on financing, providing more liquidity for the construction industry, which can strengthen and boost the industry further,” said Yeo.
Yuvanesh TS, General Manager (Singapore) of Lauretta, a behavioural artificial Intelligence company that uses cameras to infer occupant behaviour, also believes that there will be a convergence in PropTech and ConTech fields with a shared affinity for data pertaining to physical spaces.
“The amalgamation of sensors, Internet of Things devices, and cameras facilitates the collection of both existing and new data streams. These sources of data are a treasure trove for constructing first in class datasets, which, in synergy with AI at scale, serves as a platform for profound insights.”
This increase in data will capture a world in flux. Pointing to a reversal of the remote working trend prevalent during the pandemic, Yuvanesh said that the return of people to offices and stores, and their commute to these locations, are catalysing the growth of PropTech and ConTech.
“This transformation has not only redefined the management, construction, and utilisation of properties but has also tackled emerging challenges and unearthed new prospects arising from the crisis. The magic is in the data. Mature property organisations are developing platforms that collect, integrate, and may even package and offer data and insights as a service,” he said.
Of course, most workers may be accustomed to being watched by managers or peers, but not monitored by sensors and other similar technologies. There has been some outcry over sensors placed beneath office chairs to track office occupancy, so employers and landlords will need to manage privacy concerns. Yuvanesh recommended small pilot programmes to test the usability of PropTech solutions in real-life situations.
“Trying it out on a small scale is an excellent way to stay up to date with the art of the possible and allows for organisations to mitigate potential risks and facilitate change management,” he said.
Source: Startup SG