Proptech

What Is Proptech and Which Players You Should Follow in Asia

Property technology, also referred to as proptech, is an emerging trend that aims to leverage technology to improve the services we rely on to buy, sell, rent, build or manage residential and commercial property.

Proptech startups are set to transform the real estate sector by bringing greater efficiency and better consumer experience. They offer a wide and varied range of services that goes from providing virtual house tours, online brokerage, to using Big Data to enable customers to make better decisions, and Smart House hardware and software.

The trend is taking off globally, with startups in the sector raising a record high of US$1.7 billion in 2015 across more than 190 deals, according to CB Insights. This represents a 50% increase year-over-year and an 821% rise compared to 2011’s total.

While the US remains the leader, accounting for almost 50% of venture capital injected into proptech startups globally in 2015, Asia is seeing two major players emerge: China and India, which are capturing around 26% and 8%, respectively, according to the Bangkok Post.

Of the top 10 funded proptech companies globally, between 2011 and 2015, the top 2 were Chinese. These are Fangdd, a real estate platform connecting property sellers to home buyers, and Aiwujiwu, a Chinese rental and second-home listings portal. The number six is India’s housing.com, a real estate search portal.

Many US and Europe-based companies are trying to expand to China and India as they look tap into the countries’ large size and diverse populations of 1.3 billion and 1.2 billion people respectively.

Lamudi, an online real estate marketplace focusing exclusively on emerging markets, was launched in 2013 by German firm Rocket Internet. In 2014, the company began to intensively expand its operations in Asia and Latin America. Today, Lamudi is available in more than 30 countries including Pakistan, the Philippines, Indonesia and Sri Lanka.

In Singapore, locally based proptech startups have captured around 6% of venture capital funding. Despite Singapore’s limited resources and limited market size, the government’s support and a set of initiatives are allowing startups to grow and further expand to neighboring countries such as Malaysia, Indonesia and Thailand.

Thailand-based DD Property is one of the many Southeast Asian affiliates of Singaporean Property Guru, the region’s most successful real estate portals, serving 12 million users per month. Property Guru raised US$49 million in 2012 and US$129 million in 2015, and operates in Singapore, Thailand, Malaysia, and Indonesia. In October 2016, Property Guru invested in Vietnam’s biggest real estate website Batdongsan to gain a foothold in one of the fastest growing countries in the region.

Batdongsan is used by 2 million people per month in Vietnam and has about 500 employees across seven offices.

Another platform in Singapore is PropQuest.sg, which provides a one-stop property portal for investors and realtors.

Kuala Lumpur headquartered iProperty Group, which develops and operates real estate portals and delivers related real estate services and project marketing across Asia Pacific, was acquired by News Corp’s Australian real estate website company REA Group Ltd. for A$580 million (US$414 million) in late-2015. The group owns portals in markets that include Malaysia, Thailand, Indonesia, the Philippines, the Hong Kong region and Singapore.

In parallel, Singapore’s top property developer CapitaLand launched C31 Ventures in June 2016, a S$100 million venture fund targeting startups. C31 Ventures is part of the firm’s effort to innovate and build real estate of the future.

Featured image By Sergey Nivens, via Shutterstock.com.