I am back from the MetaProp NYC/MIPIM PropTech Summit hosted in New York City last week. It was a great event and I applaud all involved for putting it on. The summit, one of the main events of the NYC RE Tech Week, was notable for several reasons. It was well attended. I met people there from all walks of industry, not just tech and real estate, but consultants, VCs, policy makers and of course, lowly enthusiasts like myself. It was politically connected. Paul Massey announced his mayoral candidacy and one of the main panels involved discussions about the government’s role in PropTech. Also, it was competitive. The bulk of the event revolved around a competition where cutting edge startups vied for the chance to go up against winners from other MIPIM events at a conference in Cannes, France, one of the biggest CRE tech events globally.
While doing my travel laundry and daydreaming about the awesome meals I had in New York I found myself thinking mostly about the winners of the startup competition, so I am going to focus on them for this article. A full review of the event can be found here.
The first category was for smart buildings. It seemed like expectations for this category were high. So much attention has been put on building technology that the crowd seemed primed to hear some revolutionary ideas. It is this expectation that made the winner, Ravti, even more remarkable. Ravti is a platform for HVAC management and Alex, the company’s co-founder did a great job of explaining the importance of this seemingly mundane pain point. “Yes, by HVAC I mean Heating, Ventilation and Air Conditioning systems,” he said with a knowing smile. While his business model doesn’t have instant attractiveness, the presentation went on to sway listeners to its importance. “Around 35% any buildings cost can be attributed to the HVAC system. Currently, service receipts and purchase orders are all done with this,” he said, holding up a carbon copy of a handwritten receipt. While facility managers understand this annoyance, the general audience didn’t really come around to the power of his platform until he deployed a universally liked concept, namely, cutting out the middleman.
Before founding Ravti, Alex worked for Trane, one of the biggest HVAC supply chains. He realized that both local distributors and contractors were marking up the materials that go into HVAC installations and repairs. Ravti is not only a convenient way to track equipment and services for facility managers, it is also a way to harness buying power and realize a cost savings. At this point in the presentation, he had the audience on board. After dispelling a few potential threats brought up by the judges (would their be pushback from the contractors/suppliers?) Alex was able to walk off the stage with a big smile. The win for Ravti came as little surprise to the people I was sitting with and their success as a company will come as even less of a surprise to me.
The next category was smart cities. With the political theme of the summit, these contestants faced some of the hardest scrutiny from the judges. The winner was Envelope, an advanced software that helps developers visualize zoning constraints. Currently, Envelope is pursuing an engagement with NYC, unleashing their program on the hundreds of pages of municipal building codes. This algorithm automatically pulls any zoning rules out of the text for any parcel and puts it into a format that developers and architects can easily use. The company’s genesis from a collaboration between award winning SHoP architects and the director of MIT’s civic data design lab seemed to hold a lot of weight as the ability of the software to perform this ultra complicated task was not questioned. What was questioned, though, was the usefulness of the software when many cities, unlike the progressiveness of New York City, don’t allow public access to these types of zoning documents. Those fears were put to rest by the presenter citing everyone’s hope that other cities will follow NYC’s example of transparency. While I think Envelope will doubtless help many developers in understanding complex zoning codes, the underlying technology is the most exciting to me. Science fiction seems to be caught up on the possible conflicts between machine learning and humans. What is less publicized, but more probable, are the possibilities of using machine learning to help humans understand incredibly complicated data sets. I look forward to my computer assistant that will be able to scrape important data from texts and organize it so it can be easily understood by my (at times highly) limited human brain.
The final category was for transactional technologies. In my mind this is always a tough one. Building a transactional technology requires chasing two markets, one on either side of the transaction. For these types of business models to work, all players involved need to benefit. StackSource, the eventual winner, made a compelling case that their online platform for real estate loans is a win-win. When I asked co-founder Tim Milazzo about his offering after his win had been announced he told me, “Everyone involved in the commercial mortgage origination process knows that the space is ripe for a more modernized process. Property owners want transparency and control when they access the debt capital markets, and mortgage brokers are sales and service people, not technology builders. There’s too much at stake to leave the loan market in the 90s.” I agree with him. Most loan officers that I know are always bogged down by the origination process. Owners, the ones with the most at stake, tend to feel like they are along for the ride in the borrowing process. While the company is still in its beta testing stage, the team (ex-google, facebook and NorthStar employees) and the backing (they are part of the 2016 TechStars fintech accelerator class) seemed to give them a lot of clout. They along with the other winners, will compete in the finals in Cannes. Tim, echoing the sentiment of many other CRE tech companies, said this about being exposed to a global audience, “We’ve already received early calls asking us to launch in Europe next, but I don’t think we’ll be ready to announce that by March!”
All nine of the contestants showed a lot of promise for being involved in such an important event. I expect to hear more from all of them in the near future. While I only had time to report about the winners, I think everyone involved enjoyed hearing about these new, exciting companies on the forefront of the real estate tech world. With the positive reception that I heard, I think we can all look forward to more of these stimulating competitions in the future.