“We need heroes and we believe that entrepreneurs and designers and engineers and creatives are really the heroes that the 21st century needs the most,” said Micah Kotch, the Managing Director of Urban-X, about the startups that pitched their ideas at the Cohort 04 Demo Day at Greenpoint, Brooklyn last week.
Urban-X is an urban tech startup accelerator created in partnership with car manufacturer Mini and venture fund Urban Us. The accelerator, which runs its program biannually, selects up to 10 startups and invests $100,000 per company. In 20-weeks, they work together to bring the startups’ products to market.
Today, their portfolio companies have made an impact in over 100 cities around the world told Kotch. He added that the startups are actively working towards making the city more safe, efficient, transparent and enjoyable.
The four PropTech startups that were featured at the event included: Avvir, which automates quality assurance for the construction industry; Campsyte, which converts underutilized urban spaces into lively ones; Rentlogic, which provides letter-grade rating system for apartment buildings; and Sapient Industries, which develops smart outlets powered by machine learning to reduce energy usage.
In the construction world, small mistakes can cost you trillions of dollars. There are two ways these problems can manifest. First, due to lack of foresight when a building goes up, mistakes that are made are not caught in time. Second, when completed, the construction plans do not match up with the actual building that went up. The engineers, when fixing the problem, will have an inaccurate reference of the building—wasting time and money.
Through laser scanning and computer vision algorithmic reading of the scan results, Avvir creates a “digital twin” of the building under construction. The digital twin is an accurate replica of the construction site or building. Essentially, it is like those hologram buildings that you see in sophisticated heist planning operations in the movies. With the digital twin, the general contractor can track the progress of the building on a granular level. Raffi Holzer who leads Avvir said digitizing every aspect of the construction process will enable people to take the pulse of the construction at any time.
Today, Avvir counts Facebook and the New York City Economic Development Corporation as their clients. The startup has over $8 million of signed letter of intent and a $40 million pipeline in business over the next two years. To generate revenue, Holzer said, the company charges a monthly fee on a per project basis. A typical project yields $3,000 per month. Presently, Avvir is only generating revenue during the construction phase for its construction monitoring business—a $12 billion market. In the long-run, it hopes to provide asset management services for existing real estate developments—a $120 billion market.
Campsyte is a company that has figured out how to monetize urban blight. The idea is to turn underutilized spaces—such as parking lots—that aren’t primed for redevelopment and converting them into outdoor event space or co-working spaces. Targeting corporate clients, Campsyte cites a study that working outdoor increases an employee’s productivity by 19%.
By adding trees, outdoor seating, hammocks and internet connectivity, Campsyte increases the value of a parking space up to a multiple of 10. Annually, the average parking lot makes $4.90 per square foot. Campsyte, on average, earns $33.93 per square foot. Its prototype in San Francisco generated $130,000 in revenue in 12 months. Campsyte currently counts LinkedIn, Zendesk, and Strava as their corporate clients.
Currently, Campsyte has two locations with 24 more locations in the pipeline said cofounder Niki Choo. Choo said her startup is tapping into the $2.5 billion unrealized opportunity across 100 cities. In the next 18 months, they hope to grow the company by six locations and make an annual recurring revenue of $1 million.
Rentlogic is to apartments as health and safety rating is to restaurants. By giving buildings letter grades, renters can compare the apartment quality, landlords can differentiate themselves, bankers can underwrite more accurately, and cities can better understand the quality of housing stock. The letter grades that they assign are objective and verified by third-party property appraisers and engineers.
Its clients include Blackstone, the world’s biggest owner of real estate, and Phipps Houses, the largest affordable housing developer and owner in New York. Yale Fox, founder of Rentlogic, said one in four renters in New York has used Rentlogic. Their business model is simple: they charge $0.20 per unit per month. In the years they have operated, Rentlogic has a 100% renewable rate. Fox noted that even with its relatively weak market penetration, the company is expected to generate $65 million in annual recurring revenue by 2022.
In New York alone, 85,000 non-luxury buildings have over 250 units—a unit threshold that typically signifies that a building has a marketing budget. The company still has plenty of opportunities to scale its local operation. Fox, however, also added that the company is ready to scale nationally with minimal cost.
Sam Parks, cofounder of Sapient Industries, revealed that building users—whether it’s office workers or apartment renters—have turned a blind eye to the little negligible contributions to waste in our buildings. Here is how we are wasting energy: we leave our devices unintentionally plugged overnight or during the day when we don’t use them. We unintentionally use electronics that are energy-intensive because we don’t know how much it costs us. Sapient Industries believes our behavior has resulted to half of the energy consumption that we use in our buildings as waste.
Their solution for the energy we waste is an integrated smart outlet and energy management system. Through a building-wide deployment of smart outlets, Sapient can calculate the amount of wasted energy sent to outlets, locate equipment that are underperforming, and identify building spaces that are underutilized. Using machine learning, the plug load management system can reduce up to a quarter of the energy consumed.
Built on the premise of reducing a building’s operating expense by lowering the energy output, Sapient is marketing their product to large real estate development and construction companies. By the end of 2020, they hope to have rolled out their products to over 30,000 buildings.
In the next couple of weeks, the startups will meet with venture capitalists in New York, San Francisco and Palo Alto.