Over here in the UK right now, everybody has loads of important decisions to make but nobody has a clue what’s going on, and everyone has loads of questions that nobody has the answer for. It’s fun; we call it Brexit.
To make things even more interesting, we’ve got this rule where those people who are meant to provide the answers to everyone’s questions, so that they can make all their important decisions, must always be the ones who ask the most questions. It’s a cool idea. I don’t know if you’ve ever seen the Saw movies, but it’s a lot like that.
However, it’s like they say, too much of a good thing…and that’s why it’s distressing to see that the PropTech industry seems to have started playing the very same game.
A number of organizations have recently released their end-of-2018 PropTech data reports. Data reports designed to offer industry professionals answers to important questions. Each and every one of them, without fail, offers a very different picture of the industry, from the number of companies operating in certain markets, to the amount of money being raised around the globe. One claims $9.6bn in investment, another claims $19.9bn, yet another purports to be tracking around $4bn. Which is it?
The result of this is, at best, that everyone remains confused. At worst, people will make important decisions based on flawed information. Ironic really given how much time we spend explaining the importance of collecting and storing data in a well-structured manner to the property industry at large!
That’s why we need all of the data providers who are making claims about the sector to offer some kind of insight into how they processed their data.
Put simply, what is the methodology and to what data was it applied?
Classification for Navigation
The reluctance to provide underlying datasets is the breeding ground for another profound shortfall, and that’s a lack of cohesive agreement on what PropTech actually is. Without the data, the user cannot ascertain the methodology by which the publisher has concluded that any given business is PropTech or not.
We call on the likes of ReTech, CBinsights, and Venture Scanner to release the list of companies they consider to be PropTech and explain why. How are they categorizing the various sub-sectors of PropTech? Are they including companies from the worlds of ConTech and architecture? If so, why? If not, why?
That’s why we have practiced what we preach with our 2018 figures. All of the underlying data and our methodology is set out on our website for anyone to interrogate and understand. We hope that others will follow suit.
The Unissu methodology can, at times, be quite complex. As said, a full breakdown of the methodology is available on our website, but I can, here, share some of the very top level ingredients which are just as important in helping our audience understand how we arrive at our figures.
Unlike many data providers, we believe that ConTech companies should be classed as PropTech. This is because the “build” stage of the property lifecycle is essential for the eventual use of the underlying asset – considering the two industries as separate is, we believe, to suggest that property could exist without construction. Furthermore, with Build-to-Rent exploding, traditional property businesses are increasingly driving technology earlier and further along the value chain as they consider their newly-discovered, long term customer relationships.
Second, we do not include companies in the so-called space-as-a-service sector.. This means, for example, that the We Company is not included in Unissu data – they have created a new business model, sure, but should not be classed as a PropTech company. Others who do consider We Company as PropTech might wish to argue their case but can easily adapt our figures to compensate for a different world view.
Vitally, we have a created a categorization system for PropTech companies, something not attempted by anyone else to date.
This system means that we can consistently offer a clear and accurate picture of which PropTech sub-sectors are seeing the most activity, which are seeing the most funding, or whether certain regions of the world are specialising in certain sectors, and so on. Failing to categorise PropTech companies leaves everyone clumped together. Now, anybody trying to traverse this landscape, perhaps trying to find the solutions most appropriate for their position in the property ecosystem, has a direct route to finding what they want.
By breaking PropTech into simple categories, mutually agreed upon across the world, our understanding of industry activity and potential can be far more nuanced than ever before.
Rallying around a Universal PropTech Discourse
We are moving from an industry of multiple regional markets to one, global community, working in tandem across all nations to address the biggest issues in real estate and best prepare it for the future.
Our industry is made up of people from all corners of the earth and countless different industries – it’s an eclectic mix of thinkers which has made PropTech so powerful so quickly. Only by taking steps like this, to empower the property industry with the best information, will PropTech have the strength to become truly global, quickly.
A very different mindset to the Little Britain mindset said to be held by many Brexiteer “Leave” voters perhaps. We must avoid such division in the PropTech industry and seek to come together for the benefit of our shared futures.