Cologne Successfully completing a round of financing seems increasingly difficult for start-ups in times of the corona crisis. Investors are holding back. Nevertheless, Kiwi, provider of digital locking systems, has ten million euros from its shareholders such as Arbonia and German living collected. Kiwi wants to use the money to grow and develop new products.
Like many other start-up scenes, the proptech industry is suffering from postponed financing rounds – liquidity is a critical issue for start-ups even without a crisis. But if one of the lessons from the shutdown is to digitize more in the future, this could give Proptech a new impetus.
The growing proptech scene shows how many founders see potential in the digital real estate industry, as startups in the real estate industry are called. In German-speaking countries, the investment company Blackprintpartners will have around 750 Proptechs in 2020, 72 more than in 2018.
Now they are facing a test: “Most proptechs are still in the early phase and burn money, they live from one round of financing to another,” explains Christian Schulz-Wulkow. The head of the real estate sector for Germany, Switzerland and Austria at the consulting firm EY is skeptical about the short-term development: “Corona will massively delay sales and new projects if they are not even at risk – but the costs for Proptechs will continue. Typical sales channels such as trade fairs and conferences are eliminated. ”
Schulz-Wulkow said that investors who invest in Proptechs would have other problems anyway. You would ask yourself: “Which of our investments should we write off? Which make losses, and which do we finance through? ”The upcoming consolidation process could therefore accelerate. Despite the pressure, there are Proptech segments that are benefiting from the crisis.
Schulz-Wulkow describes proptechs who help people work more independently of locations as crisis winners: “After all, the world saw it, it has to and it can be worked from the home office.”
There is a lot of talk about digital solutions in real estate transactions.
A start-up that starts here is 21st Real Estate. With tools developed in-house, Proptech analyzes and evaluates locations, properties and portfolios. They also use digital help to forecast the development of rental and purchase prices.
Right now, smart data is an important basis for reliable, objective assessments and thus for risk minimization, says Nicolai Wendland, co-founder and IT manager, CIO, of 21st Real Estate. Hypothekenbank Berlin Hyp, which already started in 2018 as a strategic investor, is relying on its solution.
Document managers like Evana or Architrave could also benefit from the crisis. Both Proptechs offer the digitization of analog documents such as purchase and rental contracts, which are then organized and managed by artificial intelligence.
New access systems
Providers of digital access systems such as Kiwi are also hoping to gain momentum. The situation is similar at Nexenio. Among other things, Proptech offers interaction-free access control. Whether access to a building or part of a building is granted depends on two factors.
On the one hand, the user must have a device released for identification with them. Based on the sensors built into the smartphone, the software recognizes the typical movement pattern of the user, the second factor. So if someone wants to use another user’s smartphone as access, they will be denied access because they do not have the same movement pattern.
At the moment, the corona crisis is also restricting Nexenio, admits Christian Kregelin, who is responsible for business development at Proptech. So far, there have been no failures in the delivery of their system, but there have been delays of three to five months: “Since many offices have been closed, we cannot now implement our system on site.” In the long term, however, a positive development could follow: Nexenio is increasing the number of requests where its system should replace previous technology that works with fingerprints.
Communication between tenants and landlords could also increasingly shift to digital. The Proptech Animus has developed an app that allows residents of a district to communicate with each other, send complaints to the landlord or the caretaker, but also book package and laundry services.
The app, which is normally adapted to the wishes of the respective real estate operator, now offers Animus as an emergency solution, a less strongly individualized app. This is intended to facilitate neighborhood help, for example shopping for the elderly and risk groups, explains Carolin Ehrensberger from Animus.
Stefan Zanetti, founder of the Swiss start-up Allthings, also reports increased demand for his app: orders in April are three to four times higher than before. A marketing gimmick certainly helped: The Swiss temporarily provide interested customers with a light version of their app free of charge.
Corona may make some rounds of financing more difficult. The holding company Blackprintpartners, however, is optimistic: The changes provoked by the pandemic could give digitalization a decisive boost. Retained capital will be released after the crisis.
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