TechTalk Live: There are “huge markets” in property that have no technology penetration but have potential for considerable value, according to Zac Schwarzman’s keynote address to EG TechTalk Live.
The US venture capital investor, a partner at MetaProp NYC, said there is a “seismic shift” coming into the real estate world, noting that there is an imbalance between the industry’s contribution to GDP compared to the amount of capital targeting start-up opportunities.
He said that while residential and front-facing sectors have already started seeing a flow of money, some of the back-office work, such as insurance and surveying, is especially underfunded.
Schwarzman said: “The kind of things that put people to sleep at cocktail parties – there is money in that.”
Despite the lack of funding in certain areas of proptech, Schwarzman said it is becoming easier to secure investment because understanding is growing among investors. Part of this is because early property start-ups, like WeWork, are starting to prove there is potential for good returns.
He said: “We’ve seen a real ramp-up in the last five years in dollars flowing into proptech.
“You now have companies that have real value, which gives investors comfort.”
Younger personnel within bigger real estate firms has also meant that the businesses that have the ability to fund technology ventures are starting to understand the necessity of doing so.
Schwarzman said: “The big challenge has always been distribution and it is now becoming a bit of a smoother process to find your initial customers and to see people carving out significant dollars on their balance sheet to invest in tech.”
Although his experience in MetaProp has largely been in the US, those same trends are expected to follow in the UK.
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