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Q+A: What is proptech and why it matters

Any evolving industry needs its advocates and the Proptech Collective was formed to help advance the industry’s progress and raise its profile. The group’s 2021 report delved into the evolution of the industry, which has been rapidly expanding as venture capital flows to it and interest increases. The OBJ spoke to the report’s co-author Courtney Cooper to find out more.

Let’s start simple - what is proptech and why does it matter?

Proptech typically refers to any technology that impacts the real estate industry, from tech that helps automate HVAC and reduce energy use in commercial buildings, to platforms that make it easier for people to buy and finance homes. You’ll see it overlap with other areas, like fintech, smart city tech and construction tech. One of the challenges with the term “proptech” is that there isn’t a consistent definition and it’s often used pretty loosely to refer to anything in real estate related to tech, innovation, and new business models or mindsets.

That said, there is real change happening. In the past, the real estate industry has lagged behind other industries when it came to tech adoption. In the last 10 years, and especially in the last five, we’ve seen investment and use of real estate technology take off and an increase in top entrepreneurs choosing to found tech companies focused on this asset class.

For commercial owners and managers, the applications of these technologies can increase net operating income, improve efficiency across the value chain, and drive new revenue streams and business models. We’re also increasingly seeing opportunities for tech to help the industry decarbonize and reach net zero goals. For individuals, we’re seeing proptech impact the way we live and work by making our everyday experience more convenient, frictionless and accessible.

What is the Proptech Collective and why was it formed?

Proptech Collective is a not-for-profit, volunteerrun organization. It was created as a platform for people across real estate, city building and technology to collaborate, learn from one another and, ultimately, advance the adoption of technology that solves real problems for the industry. There are wonderful industry organizations in real estate and technology, respectively, but we found there was an opportunity to bring both sides together and help highlight the depth of the talent and activity occurring in the Canadian ecosystem.

Who is this report for and what was the purpose of writing it?

We’ve had thousands of people download the report, from real estate leaders to investors and tech innovators. Before our report, there was no aggregate data on the Canadian proptech ecosystem, so it’s been a helpful resource for people to understand the scale of what’s happening in Canada, who the leading companies are, and where innovation is happening. Based on the feedback we got, we’re planning to release an update to the report this year.

You say Canada is an emerging hub for proptech companies. What is the country’s global influence like in the space?

Canada has all the ingredients to be a global proptech hub. We are home to some of the largest real estate and construction companies in the world. Canada has a strong and growing tech community, friendly immigration policies and

supportive ecosystem for innovation. There are already over 300 proptech companies based in Canada and many of the largest global real estate technology companies have or are opening offices in Canada. If they don’t have physical offices here, they are often here to see their biggest customers and partners.

Has Covid accelerated the acceptance of proptech?

Absolutely. Moving to remote work forced everyone to take a look at how they worked and the technology they were using to stay connected. On the residential side, we saw a dramatic increase in the use of resident experience platforms (e.g. for payments, communications, events, etc.), virtual tours, and digital leasing. According to the Center for Real Estate Technology & Innovation, nearly half of the investments in proptech in 2021 was on the residential side.

Across the industry, we saw adoption of cloud-based platforms and collaboration tools, from investment deal management platforms to construction site management and design. Within offices, we’ve seen an increased focus on tenant experience platforms, automation/touchless, and other creative ways to make the return to the office more frictionless and attractive to teams.

Is venture capital finding its way to these companies?

Investment dollars are flowing into this space more than ever before. Globally, proptech had a record year in 2021 for venture investment and mergers and acquisitions. There was $32 billion in funding for proptech companies, nearly a 30-percent increase over 2020. That brings us back in line with 2019 levels. Canada has a few proptechfocused venture funds, including Alate, which is where I am, as well as Greensoil and Goundbreak, and accelerator programs like REACH Canada and Colliers Techstars. We are also seeing more U.S. investors take notice of what’s happening in Canada, so we’re seeing more attention and investments in Canadian companies.

On the M&A side, there were over 124 deals by Q3 2021, including VTS’s acquisition of Lane, which was the largest proptech acquisition of a Canadian company, Altus’s acquisition of Reonomy, and Procore’s acquisitions of Indus.ai and Skylight, both of which are based in Canada.

Courtney Cooper is a principal at Alate Partner, an early stage venture capital fund focused on real estate technology, and co-founder of Proptech Collective. She recently helped to produce the Proptech Canada Report.

The Proptech Collective report summarized three themes in the industry


LOCATION, LOCATION, AND DATA: Location has always been a driver of asset value, but a building’s digital infrastructure is increasingly important. For real estate companies, internal analytics capabilities are becoming a “competitive moat”, and data is the foundation to their innovation strategies. PLATFORM-AS-A-SERVICE: There are lots of point solutions, but real estate companies are looking for a one-stop-shop or integrations between platforms.

LOYALTY AND TECH-ENABLED REVENUE: Real estate firms are leveraging technology and data to build deeper relationships. By going beyond the transaction and providing additional products and services, they create ancillary revenue streams that capture more value from existing customers. THE RETURN ON DOING GOOD: Technology will play a critical role in measuring and enabling impact.


DIGITAL IS HERE TO STAY: COVID-19 accelerated the pace of tech adoption; what was previously good-to-have is now essential. Proptech firms have the opportunity to simplify and digitize existing processes, facilitate remote work, and help firms reimagine indoor space for tenants. THE KING-MAKING EFFECT: The adoption of a tech solution by a top-tier real estate firm can significantly increase odds of success by sending positive signals to the industry and reducing risk. CANADA, A SECOND HOME: Global proptech firms are expanding to Canada to serve local customers better and take advantage of the high-quality talent pool. A RECIPE FOR SUCCESS: Bring real value through efficiency and productivity; solve one problem very well; aggregate data to drive insights; and improve the user or tenant experience.


INDUSTRY EXPERTISE IS INVALUABLE: Combining industry expertise with venture backgrounds is key to success. There are a growing number of proptech-focused funds, suggesting the importance of having both skill sets at the table.

CANADA’S BUILDING BLOCKS FOR PROPTECH: With major real estate markets and leaders, as well as a deep tech talent pool, Canada has the foundations for unparalleled opportunities in proptech. TECH THAT MAKES A DIFFERENCE: Canada has strong demand for tech solutions that help address housing affordability, environmental sustainability, and operational efficiency in both existing buildings and new construction.

PROPTECH CAN HAVE MULTIPLE WINNERS: Real estate is the world’s largest asset class. The sheer size of the industry leaves space for multiple winners in Proptech, whether it’s geo-specific or solution-based.

Source: Proptech Collective 2021 report