As of 2021, there are hundreds of thousands of companies classified as “tech” companies in the US.
Beyond the big 4 – Amazon, Apple, Google, and Microsoft – you’ll find companies in sub-categories like Fintech (financial technology), Martech (marketing technology), Contech (construction technology), Edtech (educational technology), and Proptech (property technology). REtech (real estate technology) and CREtech (commercial real estate technology) can be considered subsets of Proptech. And that’s just a start.
But what institutes a Proptech company? Is it just another buzzword, or does it represent a real business evolution?
First, let’s take a look at different ways Proptech is defined within the market.
As reported by Forbes, real estate ranks as the largest asset class in the whole world worth $277 trillion, three times the total value of all publicly traded companies. And Proptech is just one segment of the collective whole (albeit a rapidly growing one).
Depending on who you are, what market you serve, and how broadly you look at the category, there are several definitions of Proptech.
According to Common, Proptech is a movement in the real estate market toward efficient systems rooted in exploring the digital landscape and tending to new consumption patterns.
From an investor’s point of view, Proptech is driving efficiencies in real estate, ultimately leading to improved asset returns, reduced friction, and greater transparency, as defined by the Motley Fool.
Holistically, you could say the Proptech trend is an innovative approach to the real estate industry in which technology optimizes the way people research, rent, buy, sell, and manage a property.
At the 30,000-foot view, Proptech is any technology embedded in real estate assets.
To more specifically define Proptech, you can break it down even further. According to Andrew Baum of the University of Oxford, there are four distinct verticals within the Proptech sector:
Smart Real Estate is focused on the operation and management of real estate assets. Companies in this sector are in the business of providing information about buildings or facilitating the control of these buildings for their clients.
Shared Economy specializes in real estate assets serving the occupier markets. These companies typically provide information to users and act as a facilitator for a broad range of transactions utilizing rich commercial real estate data.
Real Estate Fintech focuses on the trading of real estate asset ownership. Companies in this vertical usually specialize in providing information for buyers and sellers, or sometimes even directly performing the operations.
Contech serves engineers and architects in the design and construction of buildings. This sector is focused on clients in building and construction work.
Examples of some popular Proptech companies are Opendoor, Zillow, and Airbnb just to name a few.
Regardless of how you define Proptech, there’s one thing everyone will agree upon: it’s a direct result of the digital transformation movement going on over the past decade.
Deloitte offers this simple definition of digital transformation: it’s all about becoming a digital enterprise. An organization invested in this kind of innovation uses technology to continuously evolve all aspects of its business models (what it offers, how it interacts with customers, and how it operates).
This is accomplished by bringing new, cutting-edge technology into the mix and combining it with older, more established business infrastructure, processes, and strategies with the ultimate goal of creating more productive and predictable business models.
Looking back at the definitions of Proptech, we can make a strong case for the fact that RefineRE can be classified as a Proptech company. Take a look to see if you agree:
With RefineRE’s Business Intelligence Suite, the corporate occupier can build a business case for all of their company’s locations based on their own portfolio data appended with third party market data, actual headcounts or utilization and other key metrics from various internal systems – and then benchmark all of it against the market in about 15 minutes.
RefineRE customers can finally move beyond managing critical dates and endless spreadsheets with a proptech solution to align your real estate with your business real-time using data, analytics and benchmarking.
Using best-in-class, unbiased market transaction comps that are relevant and specific to your real estate assets, RefineRE enables you to better pinpoint cost savings opportunities, explore data that matter to you across the US in any market or submarket, and view your portfolio through a cost and opportunity perspective for better planning of both upcoming short-term and long-term cost and saving opportunities.
Finally, Proptech businesses are about making the lives of the customer, the tenant, the landlord, the investor, and all other shareholders infinitely easier. That said, we can conclude that Proptech is much more than just a buzzword. It’s one of the fastest-growing startup sectors in the world, and RefineRE is proud to take its place in transforming the real estate industry.