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The Australian Proptech Industry Map 2021 BUILDING AUSTRALIA'S PROPTECH ECOSYSTEM Q2. 2021 Contact Us DELIVERED BY: INFO@PROPTECHBNE.COM PROPTECH BNE. 0428 655 507 155 QUEEN STREET WWW.PROPTECHBNE.COM BRISBANE
Foreword Property Technology (Proptech) is one of the world’s fastest-growing technology verticals, poised to revolutionise and reshape how humans design, construct, transact and interact with property infrastructure. The Australian Proptech Industry Map (APIM) is an annual report highlighting the growth of the Australian proptech economy. The national and international proptech economy is growing at a tremendous rate. With the significant increase of industry engagement, venture capital, accelerator programs, and startups coming together to form our Australian proptech ecosystem, this report aims to be a centralised point of visibility and connectedness. 2021 marks the inaugural year for the APIM report with the ambition that this annual project can continue to grow from strength to strength over the coming years. Whilst it is incredibly vital to keep our eyes on the horizon and focus on the growth of our ecosystem, this report also provides snapshots in time which can be used for industry benchmarking. The APIM is an initiative led by Proptech BNE. and supported by The Proptech Association of Australia. Proptech BNE. exists to support the development of The Proptech Association of Australia is a not-for- the proptech community here in Brisbane and profit trade association that champions technology Southeast Queensland. within the real estate industry along with driving conversation between industry and proptechs. Founded by Isaac Coonan and led by Paula Guino and Julian Brockhurst, Proptech BNE. champions Founded by Kylie Davis, Proptech Association industry collaboration, startup amplification, and Australia champions best practice, quality, sector growth in Brisbane Australia. collaboration, and consistency and seeks to drive growth through education, standards, and industry insights. PAGE 2 PROPTECH BNE. APIM REPORT 2021
Supporting the Australian Proptech Ecosystem From Strength to Strength Proptech BNE. is delighted to be playing a part in bringing further visibility, connection, and validation to the Australian Proptech sector. We may be a small team but we’re passionate about seeing this technology cluster continue to grow. We recognise the potential of the Proptech ecosystem and not just for the digital/technology solution created to serve the property sector, but for the broader impacts of an innovation cluster working hand-in-hand with industry, government, and capital to create sustainable change in the Australian economy. The Australian innovation ecosystem has seen some notable peaks and troughs in the past decade which has provided incredible learnings to the next generation of startups, startup supporters, and capital. Proptech BNE. is dedicated to leveraging these learnings to ensure the proptech economy remains relevant, achieves tangible outcomes, and is positioned as an innovation leader within the Australian economy. This is by no means a one-team effort, we have worked closely with The Proptech Association Australia along with the Proptech BNE. council of 2021 to promote, aggregate, and deliver this report and I am personally grateful to each and every one of them. I would like to give a very special thank you to the highly impactful Proptech BNE. 2021 team, Paula Guino, and Julian Brockhurst. Their dedication, excitement, and love for this sector are in large part why Proptech BNE. exists and will continue to serve the local proptech ecosystem. I truly hope the data in this report is of value to you and if there is any way I or Proptech BNE. can support you directly, please feel free to reach out. info@proptechbne.com PAGE 3 PROPTECH BNE. APIM REPORT 2021
Methodology: The 2021 Australian Proptech Industry Map was an online survey delivered over a period of eight weeks, from the 26th of January to Sector Engagement the 12th of March 2021. During this period, proptech companies from all over Australia were TOTAL ENGAGEMENT encouraged to voluntarily supply information on their proptech business, their founding team, growth rate, market entry strategy, and investment. 4,290 To comply with data security and usage, Proptech BNE. ensured that Responses Provided each respondent of the survey was informed of how their data would be captured, used, and reported on before mandating each respondent gave data rights permission to the team at Proptech BNE. 130 Participating Proptech In total, Proptech BNE. received 4,290 response answers coming from Companies a total of 130 different proptech companies in Australia. To ensure accuracy within the APIM, the team at Proptech BNE. could only use 92 of the completed responses. VALIDATED ENGAGEMENT Promotion for the APIM was delivered via social media, leveraging Proptech BNE., Proptech Association of Australia, and our supporters. Proptech BNE. also reached out directly to incubators, accelerators, 3,036 co-working spaces, and venture capital firms to amplify the Validated Responses Provided marketing efforts. An important differentiator for the APIM is the focus on capturing 95 information from the emerging proptech ecosystem (companies Revenue Generating founded in the past five years), whilst promoting the efforts of Proptech Companies revenue-generating startups. PAGE 4 PROPTECH BNE. APIM REPORT 2021
Australian Proptech Founder Profile. Who are the founders at the forefront of property technology in Australia? GENDERS EDUCATION 81.5% of proptechs in AU are founded by men 45.7% Have a masters 17.4% of proptechs in AU are 42.5% Have a Bachelors founded by women EXPERIENCE AGE Education 40.3 58.7% is the average age of AU of AU proptech founders have proptech founders previous industry experience 44.5 39.4 11 Years is the average age of AU is the average age of AU is the average industry female proptech founders male proptech founders experience of the 58.7% PAGE 5 PROPTECH BNE. APIM REPORT 2021
Founder AU proptech Profile founders are ell educated Unpacked with Genders: significant As this is the inaugural year for the APIM, 2021 can be the initial year of benchmarking for diversity within the proptech economy. According to Startup Muster report in 2019, female founders made up 22.3% of all startups founded industry in Australia. experience. According to APIM, female founders make up a mere 17.4% of proptech companies founded in Australia. This level of underrepresentation is not uncommon in the property or technology sectors, however, it poses a significant risk for the growth proptech economy in Australia. Age: The average age for proptech founders in Australia is 40.3 years old. This data suggests that the average age of a proptech founder is seven years older than the national average of 34, as reported by SmartCompany in 2020. Breaking down the data further, the average age for female founders of an Australian proptech company is 44.5, with the average for male founders coming Education: Australian proptech founders as a majority are well educated from a tertiary standpoint, with 45.7% of all proptech founders in Australia holding a master's degree, followed by 42.5% of proptech founders holding a bachelor's. 8.6% of Australian proptech founders hold a grade 12 certificate and either a certificate 4 or diploma with the final 2.2% of proptech founders in Australia have not completed grade 12. Experience: 58.7% of all proptech founders in Australia have previous experience working in the property sector. Whilst 11 years is the average experience for proptech founders, when breaking down the data further, of that 58.7%, 20.3% have 20 years + industry experience.. PAGE 6 PROPTECH BNE. APIM REPORT 2021
Proptech Foundation and Expansion Where are Australian proptech being founded and where do they want to go? FOUNDATION EXPANSION 40.2% 3.3% 42.5% 12.3% Queensland Western Australia looking to expand into looking to expand into United States/Canada Singapore 31.5% 2.2% New South Wales South Australia 23.6% 11.3% looking to expand into looking to expand into The United Kingdom Greater Europe 20.7% 2.2% Victoria ACT PAGE 7 PROPTECH BNE. APIM REPORT 2021
Proptech 40.2% of proptech Foundation and Expansion companies in Unpacked Australia have Foundation been founded The APIM classifies a Proptech Startup as being “an emerging technology business creating a product and/or service that benefits either all factions or individual factions of the property economy.” in QLD and 42.5% of The APIM classifies a Proptech Startup as being “an emerging technology business creating a product and/or service that benefits either all factions or individual factions of the property economy.” Australian According to the data in the 2021 APIM, Queensland has the highest number of proptech startups with 40.2% of proptech validated participating companies being founded in the QLD. New South Wales was the second-highest state with companies are 31.5% followed by Victoria with 20.7% of companies founded in their respective states. looking to The additional percentages are captured by Western Australia at 3.3%, South Australia at 2.2%, and ACT again at 2.2%. scale to the US Factors that have led to the majority of proptech companies being founded across QLD, NSW, and VIC are yet to be or Canada! Expansion When posed with the question “Is Your Proptech Looking to Scale Into New Global Regions”, the proptech economy shared that 42.5% of companies are looking to scale into the United States and/or Canada in the 2022 financial year. The size of the US and CA property sectors is enticing to an emerging technology startup and there are now proven models of how proptech products can scale into the US with the likes of BoxBrownie, Rate My Agent, ActivePipe paving the way for the next generation of startups. The United Kingdom is the county of choice for international scale for 23.6% of the Australian proptech economy in FY 2022, followed by Singapore at 12.3% and then Greater Europe at 11.3%. Programs such as REALTechX by Taronga Ventures and REACH Australia by Second Century Ventures are playing a crucial role in the globalisation of the Australian proptech economy through the creation of international market channel pathways. PAGE 8 PROPTECH BNE. APIM REPORT 2021
Are Proptechs Creating Jobs? Is one of the fastest-growing technology verticals in the world creating jobs for the Australian economy? TOTAL JOBS EXPERIENCE JOBS BY STATE 39.2% New South Wales 2171 Local Jobs The Australian Emerging 35.7% Proptech Economy Current Victoria Employs 2171 Full Time Staff in Australia 22.3% Queensland JOBS EXPERIENCE GROWTH Since 2017, the emerging proptech economy has created a total of 699 new jobs for the Australian economy. Data from the APIM indicates that proptech companies in Australia on average support 13 full time staff. Proptech companies founded in 2017 currently represent 208 full-time jobs of the total 2,171 and of the revenue-generating proptechs founded in 2021 over 100 jobs are represented. This indicates that the Australian proptech economy is creating more jobs at a faster rate. PAGE 9 PROPTECH BNE. APIM REPORT 2021
Proptech Proptech Jobs companies founded in Unpacked 2021 created It is a well researched and proven fact by organisations such as KPMG, PwC, and Deloitte (refer to research papers at 100+ full time the end of the report) that the emerging proptech economy is one of the fastest-growing technology verticals in the world, but what does that mean in the way of creating employment opportunities within the Australian economy? jobs in the first Of the validated responses received in the APIM in 2021, Australian proptech companies are currently supporting 2,171 quarter alone. jobs here in Australia. This number only refers to individuals who are employed in Australia and does not include international staff. Since 2017, the emerging proptech cluster has created a total of 699 new jobs for the Australian economy. Data from the APIM indicates that proptech companies in Australia on average support 13 full-time staff. Proptech companies founded in 2017 currently represent 208 full-time jobs of the total 2,171 and of the revenue- generating proptechs founded in 2021 over 100 jobs are represented. This indicates that the Australian proptech economy is creating more jobs at a faster rate. PAGE 10 PROPTECH BNE. APIM REPORT 2021
Proptech Sectors What sectors of the traditional property industry are proptechs looking to service and how are they selling their product? SECTORS EXPERIENCE CUSTOMER STRATEGY EXPERIENCE 23.2% 19.9% 15.8% 32.8% 19.9% 15.8% Residential Property Commercial Referral Social Media Direct Real Estate Management Real Estate Marketing Marketing Marketing PAGE 11 PROPTECH BNE. APIM REPORT 2021
Proptech, Proptech much like Sectors property is a Unpacked relationship Opportunity presents itself in all sectors of the real estate industry and proptech companies are advancing the digital driven agenda and enabling digital transformation. While the real estate industry may collaborate with proptechs for a industry with variety of reasons, according to KPMG Global Proptech Survey (2019), proptechs are brought in to improve efficiencies (65% of the time), reduce costs and improve decision-making. 32.5% of proptechs Of the validated responses received in the APIM in 2021, 23.2% of Australian proptech companies are currently serving the residential sector and they are followed by 19.9% focusing on property management solutions, 15.8% serving the using referral commercial real estate sector and 14.5% delivering construction technology, among a few others. When combining the proptechs focusing on property management and commercial real estate as a whole, it is clear that CRE represents a marketing as large portion of the technology being developed, totalling 35.7%. their customer The recent boom in proptech companies globally demonstrates the need for change in the industry’s culture to one acquisition that creates and sustains innovation as a way to ultimately drive the industry - across sectors - to achieve its goals. strategy. There continues to be an opportunity - as an ecosystem - to drive a shift in perception of the overall benefits of collaboration between industry and proptech companies to one that will deliver return on investment. This will significantly narrow the opportunity gap. PAGE 12 PROPTECH BNE. APIM REPORT 2021
Are Proptechs Getting Funded? Is there funding to support the growing proptech economy in Australia? TOTAL FUNDING EXPERIENCE FUNDING JOBS BY BY STATE SECTOR $94,181,000 Of funding has been secured by AU proptech companies since 2010 This graph represents the investment pattern of FUNDING GROWTH EXPERIENCE proptech companies based on if they are still in EXPERIENCE operation and the year they were founded $42.6 M $6.7M New South Wales Western Australia $28.1M $1.8M Queensland South Australia $13.8M $1M Victoria ACT PAGE 13 PROPTECH BNE. APIM REPORT 2021
Proptech The Proptech Funding Economy in Australia has Unpacked Collectively According to the data in the APIM for 2021, the Australian proptech economy has collectively raised over $94 million Raised $57M+ dollars since 2010. This funding is a mixture of industry/government grants, corporate venture capital, venture capital and family office funding. in the Past 5 The $94 million dollars of funding is also only in reference to proptech companies that are still in operation since the Years. data has been collected by proptech founders and executive staff. The $94 million is probably significantly higher when you take into account the number of companies who have either listed and or been acquired, or who have received funding but had to cease operations. The data in the APIM also reflects a significant portion of the $94 million has been raised by companies in the past five years, with the report showing that since 2017, $57 million has been raised, over 60% of the total funding raised since 2010. PAGE 14 PROPTECH BNE. APIM REPORT 2021
Are Proptechs Growing? Is there a pattern of revenue growth for Australian proptechs? REVENUE FY20 EXPERIENCE ANNUAL GROWTH EXPERIENCE This graph represents the percentage breakdown of revenue for Australian proptech companies during the 2020 financial year. REVENUE FY21 EXPERIENCE EXPERIENCE EXPERIENCE 5.4% Increase in proptechs generating $500K to $1M from FY20 to FY21 8.2% 36.1% 9.7 % have a 100%+ Annual have a 21% to 51% Annual Increase in proptechs Growth Rate Growth Rate generating $1M to $3M from FY20 to FY21 3.6% 16.7% 13.9 % have a 51% to 100% Annual have a 11% to 21% Annual Increase in proptechs Growth Rate Growth Rate generating $10M+ PAGE 15 PROPTECH BNE. APIM REPORT 2021
In the FY21 Proptech the Australian Growth proptech Unpacked sector grew As 2021 was the inaugural year for the APIM report, the survey only captures three key data sets to assess the by 8.2% of revenue growth rate of the national proptech economy. companies Firstly, the APIM map captured annual revenue earnings during the FY20 period. As this is sensitive data, the AMIP generating report allowed founders and/or executives to share their FY20 revenue on a scale: over a million Sub $500K > $500K to $1M > $1M to $3M > $3M to $5M > $5M to $10M > $10M to $20M > $20M + dollars in annual According to the data collected, 72.5% of proptech companies in Australia fell into the sub $500K annual revenue, with 10% making it into the $500K to $1M and another 10% in the $1M to $3M bracket. From there it was a rapid drop to revenue. 2.9% of proptech companies in the $3M to $5M and 2.9% in the $20M+ bracket. The second data set captured was "known and expected FY21'' annual revenue. The APIM was officially closed to recipients at the end of Q3 for the 2021 financial year so there is a mix of known and expected revenue for this data set, however, it will be consolidated in the APIM 2022 report and allows Proptech BNE. to benchmark industry earnings moving forward. From the known and expected FY21 revenue, there is a positive outlook for the proptech sector in the form of revenue growth, with a 5.6% increase of companies in the $500K to $1M bracket with the new percentage of 15.6. The increase in the $500K to $1M bracket is noted in the Sub $500K bracket which saw a decrease in FY 2021 to 58.4%, a 14.1% decrease from the previous financial year. Another notable increase in the FY21 numbers was the $1M to $3M bracket which saw an 8.2% increase from the previous financial year. The $1M to $3M bracket is now the largest bracket for the sector at 18.2% outside the sub $500K bracket. Whilst the majority of the other brackets either remained the same or had very little change, the $20M+ bracket had a 1% increase, bringing the total percentage for that bracket to 3.9%. Whilst this is a very small change, it is one of note as it is the highest bracket on the scale. PAGE 16 PROPTECH BNE. APIM REPORT 2021
What Are Australian Proptechs Needing? Here is what the proptech economy is needing. NEEDS NEEDS DATA JOBS BYLETTER SECTOR JOBS BY SECTOR If the consolidated feedback was to be put into the form of an open letter from the proptech ecosystem, it would read something like this: "The Australian proptech ecosystem is growing and growing fast, we as proptech founders need to see an increased level of early-stage capital, mentorship, and engagement both from the broader startup ecosystem and from the property industry itself. Opportunities to learn from and engage with the industry in a format that allows for rapid POC’s to be developed and tested is vital to the long-term success of our sector. We as an ecosystem need to do a better job at being open with our ideas, plans, and requirements to ensure we create an Collaboration between protech startup / scaleups economy built on insights, data, kinship, and community. NEEDS JOBS BYQUOTED SECTOR Data standards & Interoperability In the short term, this looks like an increase of value-driven More government investment to encourage/fund Proptech startups networking opportunities and industry events along with access to industry data. In the long term, this looks like an increase in Collaboration between protech startup / scaleups early stage / seed funding >$1mill shared learning between companies and a willingness to collaborate." More events that help in product distribution and awareness Access to detailed data on the property value chain Pilot programs The support from government and regulatory organisations in and how technology is positively disrupting the the form of access to standardized data and insights will allow Industry connection points industry us as an industry to better understand the sector and create Willingness, incentives to pilot innovations within products purpose-built for the national property economy. ecosystems Influential change agents Founders who have experience in property developmen and the industry that they're aiming to target. Direct networking of Founders PAGE 17 PROPTECH BNE. APIM REPORT 2021
Proptech Top 3 Needs: Needs 1) Industry Support Unpacked As part of the data collection process for the 2021 APIM, a question was asked to proptech founders and executives to 2) Funding better understand and gauge the current needs of the Australian proptech ecosystem according to founders. The highest-ranking response was “Industry Support” at 20.7% with the vast majority of comments calling for an increase in structured engagement between the property industry and proptech ecosystem. 3) Mentoring The comments requesting “Industry Support” ranged from indicating that industry associations should be doing a better job in demonstrating and delivering cross-collaboration opportunities for their members and the emerging technology cluster, to asking for industry corporations to create formal internal structures to allow for more seamless engagements. Access to “Funding” was the second-highest-ranking response at 15.5% and in particular, access to seed/early-stage capital, sub $1M, to ensure companies looking to build, validate and pilot their product have the capability to do so. “Mentoring” along with “Standards and Guidelines” came in neck and neck at 12.1%. When looking at the request for mentors, there was less of a focus on the startup ecosystem or business mentors, rather a need for industry professionals and thought leaders to mentor proptech startups directly. The leading call for “Standards and Guidelines” was around data, how as an industry, there needs to be further visibility into the way property corporations collect, store and use their data. “Validation Opportunities”, “Collaboration”, “Events and Networking” all come in at under 10% however, the individual comments were all suggesting similar outputs. The emerging proptech ecosystem according to proptech founders and executives needs an increased level of visibility, willingness to collaborate, and appetite to engage with each other. PAGE 18 PROPTECH BNE. APIM REPORT 2021
Proptech BNE. Meet The is strategically 2021 led by 12 Proptech BNE. Council Australian Proptech BNE. is privileged to have 12 industry thought leaders representing our organisation on an annual basis. For Property 2021, the Proptech BNE. Council is made of a truly unique group of individuals representing the professional services Thought sector, development, commercial and residential real estate along with leading proptech founders. Leaders. The purpose of the Proptech BNE. council is to provide strategic guidance on all key initiatives along with supporting the core team with industry insights to ensure every project delivered has industry relevance and tangible outcomes. Josh Callaghan Jess Caire John Christian Jeremy Hastings CEO Executive Manager Technology Director Founder Little Hinges PEXA IMANI Hutly Kylie Davis Kylie McKiernan Jason Titman Adam Di Marco Founder Product Manager Managing Director Managing Director Proptech Association Australia ARUP Intergr8 Group Urban Developer Belinda Nankivell Julian Kettle Sophie Betts Domonic Thompson COO Partner CRE Development Manager National Head of Real Estate Australian Property Institute White & Partners West Village Macquarie Bank PAGE 19 PROPTECH BNE. APIM REPORT 2021
"What does success look like for a proptech ecosystem?" "Property is a constant part of our lives and impacts the way we live, work, educate, socialise, travel etc. Proptech is playing an ever-increasing role in making our relationship with property easier and more efficient. Proptech BNE. is here to support proptech initiatives taking them from an idea to successful businesses at the same time growing the tech sector in QLD." Julian Kettle "Collaboration and cooperation sit at the heart of all great startup ecosystems and it's no different for Proptech. Founders, enablers, universities, and the industry all need to approach the ecosystem as a community where greater success comes from greater participation. Sharing ideas, making introductions, and being generous with information are the meaningful ways in which individuals contribute to the ecosystem. The responsibility sits on all of us to create a great proptech ecosystem here in Queensland and the wider APAC region. Education Josh Callaghan Success for a Proptech Ecosystem will be where the industry and tech-based solution companies work in harmony to address issues such as inefficiency, lack of innovation, and poorly executed human engagement. With so much opportunity to remove friction from the process and improve UX/CX, the ability to create new value in property should be a key driver in ensuring a strong partnership with the industries served by Proptech companies. Domonic Thompson A successful proptech ecosystem brings innovative products or new business models to the property industry’s ever- evolving digital landscape. Proptech aims to build a strong, prosperous, and efficient property sector by offering new investment opportunities and the ability to anticipate the needs of clients across all facets of the industry. Belinda Nankivell PAGE 20 PROPTECH BNE. APIM REPORT 2021
"How can the Australian proptech ecosystem scale to the next phase of growth?" Creating Common Information Models around niche areas of concern would allow systems to all speak and interact under a unified data model which would help to eliminate silos, connect systems, increase observability and ultimately drive the industry forward by helping all boats to rise. John Christian By unlocking the benefits of data, we can continue to transform and simplify the property experience for everyone. Education Jess Caire There is an urgent need for common data structures and definitions and more open-source data engagement. This will both allow greater collaboration and innovation within the proptech sector, empowering tech businesses to solve the genuine pain points of property owners and agents. It will also deliver greater insights and value to property owners, freeing them from the obligation to lock into suppliers, giving them back ownership of their own data, and giving them Kylie Davis the ability to manage, plan and receive the value from upgrades that make their portfolio smarter. Proptech provides solutions to a range of complex and diverse problems faced by the property industry. Some of these solutions are incremental and others may well be transformative. I don’t know if it’s possible for an “ecosystem” comprised of technologies that are so different from each other to scale uniformly. Rather I expect there will be some standouts whose uptake will be widespread and others that just won’t make it. A strong and differentiated value proposition, realistic/competitive pricing and compelling champions within the industry are key to the success of the Sophie Betts proptech sector in Queensland. PAGE 21 PROPTECH BNE. APIM REPORT 2021
"What gives Australia a competitive advantage in growing a thriving proptech ecosystem?" “Property development across all sectors is a passion for Australia, property development is almost in our DNA, this provides an incredible backdrop to encourage innovation, challenging the status quo and the opportunity to build a world-class proptech ecosystem. Jason Titman Australia's urban development industry delivers some of the highest quality buildings and places. Coupled with a Education robust performance-based planning regime, efficiency construction code, diverse financial base and a culture that loves property and embraces technology, we are in a fairly good position to support a protech ecosystem. Adam Di Marco Australians have an irrational obsession with homeownership. This insatiable thirst, exacerbated by landlocked areas driving demand, has created an inaccessible market for first homeowners. At the same time, generation rent are coming through, who have different priorities and perspectives on homeownership. This perfect storm for Proptech, coupled with the Covid catalyst of technology adoption, creates once-in-a-lifetime market conditions. Jeremy Hastings As Australians, we have always been obsessed with real estate from personal investments through to large corporations investments and how we interact with our investments and stakeholders, which has given us the advantage of being ahead of the other global communities when it comes to technology and adapting to that technology! Kylie McKiernan PAGE 22 PROPTECH BNE. APIM REPORT 2021
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