Despite these failures, local success achieved by the likes of hotel booking tech company Siteminder and Airbnb property management platform MadeComfy has lifted investor appetite for proptech, with money pouring into funding rounds for the next wave of start-ups hoping to steal a bigger share of the property pie.
Here are some to keep an eye on in 2020:
Both Mirvac and Stockland have bought minority stakes in the fractional ownership platform targeted at more sophisticated investors than the more established BrickX platform.
Not only have the ASX heavyweights acquired equity stakes in Bricklet, but they intend to list properties for sale on the website.
Developed by tech player Lakeba Group, Bricklet offers meatier portions of property investments (around 25 – 30 bricklets per property) and enticingly puts bricklet owners on the property title. Fees are generated from listings and managing assets.
The potential investor pool is large, but returns are low – around 2 per cent net. Capital gains could be stronger, but depend on a rising property market and the ability to trade bricklets with other investors.
In October, Managed, which styles itself as the “Airtasker of property management” secured ASX-listed REA Group as a minority investor, a significant vote of confidence in the start-up.
Managed helps property managers, landlords and tenants coordinate repairs and maintenance. Since launching in 2018, Managed has signed up 5000 tradespeople as well as more than 105 real estate agencies who are using the app to either partially or wholly manage their rent rolls.
More than $60 million-worth of tradie jobs have flowed across the app, representing more than 51,000 individual transactions. Managed takes a small fee on each successful job.
It was founded by Nick Bouris, the son of non-bank lending pioneer Mark Bouris, former property manager Thom Richards and Alex Whitlock and Phil Tarrant, directors of Sydney publishing company Momentum Media.
While an online marketplace for off-market property offerings is not new, Listings Loop will be able to call on the social media reach of Australian basketball star Andrew Bogut to promote its offering.
Bogut, who is known for speaking his mind online, became ambassador for the start-up in October after making Listings Loop his first proptech investment. Founded by Mornington Peninsula-based entrepreneur Rhett Dallwitz, Listings Loop works by alerting registered buyers to off-market properties on its database which match their search criteria. Sellers list their property for free (through an estate agent) but are charged a commission of 0.22 per cent if a deal sells through the platform.
In March, property investment firm Taronga Group, led by former Mirvac head of capital Jonathan Hannam, joined a group of angel investors to back the virtual reality start-up that helps architects and builders eliminate costly errors and design flaws prior to construction.
With building failures like Opal Tower and Mascot Towers raising concerns about construction quality, Inspace XR’s technology could become increasingly sought after. Founded by tech entrepreneurs Eric Fear and Justin Liang, Inspace is already being used by Charter Hall at its $1.2 billion Wesley Place commercial project in the Melbourne CBD and by Folkestone, Macquarie Bank, JLL and CBRE.
More than 150 tech investors piled into a recent seed funding round for property management platform Instarent, putting over $313,000 into the company via equity crowdfunding platform Birchal. Instarent is an app targeting the one in three property investors who self-manage their properties. It connects landlords with tenants via a digital platform that replicates many of the functions a traditional property manager would provide such as online listings, tenancy agreements and getting a tradie for repairs. Founder AJ Chand is hoping to take 20 per cent of the self-managed rental market worth around $5.5 billion by charging $10 a month for its premium service. Instarent says it currently hosts over 500 properties and is adding 100 new properties every month.
In the wake of the failure Purplebricks, Upside Realty has picked up the fixed-fee baton and now claims to be the country’s largest fixed-fee agency.
While yet to take on board fresh investment, in October founder Adam Rigby told the Financial Review Upside was selling one property a day and would be profitable by October 2020.
At last count it had 43 agents, some of them recruited from Purplebricks, and according to Rigby was growing revenues by at 20 per cent per month. Its business model is remarkably similar to Purplebricks, but without the heavy marketing spend or anti-industry approach taken by the UK hybrid.
‘‘We support the industry bodies. We are not bagging the industry. We want to disrupt in a positive manner,’’ Mr Rigby said.