At Ruby Ventures, we are strong proponents of PropTech, the trending sector that is set to revolutionize the real estate industry. Given our experience in both real estate and high tech, we appreciate the added value some of the new technologies bring to the table, including improvements in construction safety, sustainability and eco-friendliness as well as greater cost efficiency and tenant comfort.
Part and parcel of the property industry’s digital transformation, PropTech applies to a wide range of verticals, including construction, residential and commercial real estate, finance, and property management. Insiders have classified the sector into various categories. At MIPIM, a major exhibition and networking event
in France, for example, it was divided into ‘smart buildings/IoT (internet of things),’ ‘smart city sustainability,’ ‘market place,’ ‘crowdfunding,’ ‘ConTech,’ ‘3D/VR (virtual reality),’ and ‘data and research analytics.’
There is also a significant overlap beween Proptech, Fintech and Mobility.
According to a recent study by VC Innogy Innovation Hub, the global PropTech industry has seen investments reach $4 Billion in 2018 and continues to rapidly gain momentum. What’s interesting to note, is that much of this exciting development is actually happening in Israel.
According to the Innogy study, which was commissioned by a group of Israeli organizations and government agencies, there are currently over 100 startups operating within the Israeli PropTech scene. Together they cover all real estate verticals and various stages of a building’s value chain garnering investments of close to $1Billion over the last decade.
One reason why Israel is particularly well suited to be housing such a lion’s share of the flourishing PropTech industry is the deep technological expertise available in this country. Israeli startups leverage know-how developed in the military, as well as in the local automotive and manufacturing industries to optimize building processes, promote real estate asset sales, and dramatically enhance the tenant experience.
Several big players have recognized the extraordinary potential of Israel’s PropTech scene. WeWork, for instance, has recently launched a PropTech Labs program in Tel Aviv. Boasting a high-caliber investment committee and a strong management team, WeWork Labs combines co-working spaces with elements of a high-tech accelerator and expects participating startups to “disrupt and improve the industry.” Other international companies, such as Innogy, have also launched local operations. Last but not least, Israel itself is betting on its PropTech industry. Some large Israeli construction companies invest in the sector on their own, and Contech, the tech hub of the local construction industry’s trade association, has launched programs in autonomous cranes, 3D printers, for structural elements, drones to monitor building projects, and software for urban planning. “Our mission is to turn Israel into a world leader in innovation, making it the ‘Silicon Valley’ of construction tech,” says Zachi Flatto, chief investment officer at Contech who counts on “Israeli technologies, government support and the spirit of Israeli entrepreneurship” to fulfill this mission.
While Ruby Ventures, too, believes in the huge potential of PropTech, we are also conscious of the fact that the real estate industry is slow to change. New technologies will only be able to score if they are easy to implement and quick to demonstrate added value.
We therefore look to partner with PropTech startups who have not only developed exciting applications but also understand these imperative requirements for success. We, in turn, are excited to further boost their success by contributing capital, global reach, and strong relationships with the top players in the real estate space.
