The virtual brick

After fintech, edutech, ecommerce and healthtech, "proptech" is the next big segment for entrepreneurs. Gone are the days when real estate startups primarily meant property listing and rental platforms. Today, the infusion of augmented reality, cloud, blockchain, and data analytics is giving a new spin to the sector. Unlike other sectors, technology adoption in real estate has been slow. Estimates by McKinsey & Co state that less than 1% of revenues in the sector are invested in technology.

But this is gradually changing now, says Ajith Alexander, managing director of QwikSpec, which leverages technology to improve the workday quality of employees at construction sites and gain access to real-time data on-site regarding the construction projects. This data can then be analysed, thus saving money and time and helping in improving the quality of the project.

Although 95% of the workforce in construction is on-site, software applications have primarily targeted only the rest 5% which sits in offices. "Due to low technology adoption, labour productivity has declined," says Alexander. QwikSpec can enhance labour productivity by 25% and save up to 40% of the costs associated with rework.

Experts feel similar to players such as QwikSpec, there is a surge in new ventures in property and real estate that are focused around niches such as smart communities, virtual reality, design and architecture, nanotech, home automation, sustainability, etc.

"We firmly believe that these are the new hot spots for innovation with stunningly creative solutions, that address traditional inefficiencies and wastages that have been taken for granted so far," says Nirupa Shankar, director, Brigade Real Estate Accelerator Programme (Reap).

Snaptrude is another emerging proptech startup that converts hand-drawn designs and sketches into 3D models using the software. "The design process in construction normally can take anywhere from two to 12 months. Design is an iterative process and through the Snaptrude software, the number of iterations can be controlled and the time invested can be reduced by 50%. This helps architects deliver designs faster," says the founder Altaf Ganihar.

Bangalore based Clairco, meanwhile, leverages nanotechnology to install special filters within air-conditioners, which then converts the air-conditioner to an air purifier.

According to Shankar, any solution that helps the industry increase revenue or saves cost, basically improves upon its overall efficiency is the dire need of the hour. ''The new bunch of proptech startups are uniquely placed to address these issues."

However, experts feel ventures need a lot of hand-holding and networking opportunities to get acquainted with investors and accelerators to help them scale up at a rapid pace. "In addition to mentoring proptech startups, accelerators have a responsibility to demystify the real estate sector for tech investors and help improve the transparency where the perception is that none exists. We connect with investors only after we are convinced about the value proposition for our startups," says Shankar.

The funding scenario for proptech startups has been improving over time. According to data by global real estate services firm Jones Lang LaSalle (JLL) and Tech in Asia, proptech startups in the Asia Pacific region have received approximately $4.8 billion funding since 2013. The average global funding deal size for proptech startups has been around $10.5 million. Recently, Gurugram based proptech startup BuildSupply, which provides end-to-end enterprise resource planning (ERP) software for the real estate and construction sector had raised $3.5 million. Bengaluru based Zaasna, which offers an end-to-end transaction platform for home buyers raised Rs 2 crore in a seed round last month. QwikSpec meanwhile had raised about Rs 3.5 crore a while ago through a round that saw participation from an consortium of investors.

"Irrespective of the funding amounts, the fact that proptech is garnering increased investor attention is itself commendable," feel experts.

Entrepreneurs are now looking to gradually scale up their ventures. Ganihar says Snaptrude currently has over 400 clients across countries who are actively leveraging the platform, while 1500 more have subscribed to it. "We are planning to collaborate with universities to train the next generation of architects to get acquainted with our software."

According to Jha, Clairco currently caters to B2B clients such as gym chains, cafe, tech parks, etc. across 4 lakh square feet of space pan India. "We plan to reach 50 million square feet of space in the next three years' time and then launch our B2C operations as then affordability will be better," adds Jha.