Supply and Demand: The push to understand building energy use | EXPLORE→
proptech bridge

How Venture Capital is Leading the Globalization of PropTech

Real estate is local, but the benefit it provides is a universal need. Innovation can happen anywhere and so smart investors know no borders. Such thinking is what’s leading the most forward thinking technology investors to travel the world in search for the next big PropTech idea. PropTech companies with solutions to built world problems have the ability to proliferate almost anywhere in the world. But, there are regional differences created by culture, economics and politics that has made for an unequal landscape for property innovation.

One of the organizations looking to help flatten the PropTech world is MetaProp. The New York based venture capital, advisory and startup accelerator firm has lead the globalization charge in PropTech, including being the partner of an international PropTech competition put on by real estate event organizer MIPIM. However, the competition seems to be only the beginning of their global ambitions.

Aaron Block, co-founder and Managing Director of MetaProp, explained what they saw as a need to travel the world to find the best technologies. “To be good VCs we have to do everything in our power to find the best entrepreneurs to back. That means we can’t just sit around and wait for companies to apply to our programs, we have to go to them.”

Now they have a new program (or should I say programme?) that is designed to find foreign startups and bring them to the U.S. market. The aptly named MetaProp Bridge at Columbia University is their attempt to find and export promising property technologies outside their country of origin. The first four startups have been chosen and will receive an investment of up to $250,000 from MetaProp’s VC arm, as well as a chance to sell their solutions through the company’s extensive real estate and venture capital network.

During the exhaustive search to find the four companies that are currently in the program, Block said he came back with a better understanding of the global layout of the industry. “Certain countries often have their specializations. In the U.K. housing technology is big right now, probably because they have experienced such a steady rise in housing prices over the last ten to fifteen years.” One of the companies in their first Bridge Program is YourWelcome, a technology for vacation rentals headquartered in London.

“We saw a lot of enterprise software in Holland and northern Europe,” Block said. 720° is an air quality testing company out of Finland company that made the cut into the program. While the Bridge didn’t end up bringing on any Israeli companies, he reported a lot of great companies coming out of that region as well. “In Israel there is a ton of construction so we saw a lot of construction tech. The citizens are required to go into the military so there are a lot of strong technologists because of their time in special groups of the armed services. That, combined with a rather hard-charging culture makes it a place to watch.”

One of the stereotypes about real estate companies outside of the U.S. is that they are particularly risk averse. Block found just the opposite to be true. “The property companies are keen to invest in technology in other places, particularly Europe. They have not had the same bullish run on property values that we have in the U.S. and often have a much smaller pool of possible investments. A Spanish real estate investment group might be wary, because of language, cultural and legal barriers, to invest outside of Spain, so they tend to look for ways that they can reduce the costs of their existing portfolio.”

He attributes some of the assumptions that foreign tech companies are not as aggressive as their American counterparts to nuances in personalities. “A European or Chinese founder might be a lot less loud about their ambitions as an American, but that doesn’t mean that they are any less savvy or motivated. In a lot of ways it means that they are more calculated.”

Block did note that sometimes the way organizations are structured and run outside the U.S. can often put them at a disadvantage. “European companies tend to be much more collectively run, which means that decisions take a lot longer. It also often means that team members are self selected to agree with each other. Americans can often act as a ‘team of rivals’ in a way that opens them up to new ideas and innovations, sometimes avoiding the dreaded groupthink.”

Brilliance and innovation are equally likely to strike anywhere. With the U.S. holding only a small portion of the world’s property value and an even smaller portion of its population it makes sense for investors to search for startups outside its borders. One thing that the U.S. has traditionally been the leader in is early stage investing. This is being challenged by a flood of venture money being released in China, but still leaves the U.S. as the best place in the world to find funding. Rather than wait for other countries to change their investing practices and wade into the uncertain waters of technology startups, MetaProp is bringing international companies back stateside. They understand that with geographical differences come opportunity. With their new program they hope to build the bridge over which opportunity travels.

Image - Design