Two Cultures

The PropTech study by Union Investment and GTEC investigates how start-ups and established businesses can work together better.

Digital innovators present the challenges and opportunities of collaboration in the recent proptech start-up study by Union Investment and the German Tech Entrepreneurship Center (GTEC). About 100 proptech companies around the world took part in the survey. Over half cited "slow and cumbersome decision-making processes" as a major problem when trying to initiate cooperative partnerships with established companies. And for 68 percent, speeding up their partners’ decision-making processes is high on their wish list for effective cooperation, followed by a greater appetite for risk on the part of established companies and more willingness to embrace different collaboration models (60 percent in each case).

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Start-ups need to learn that complex decision-making processes and the openness shown by many real estate players  towards entering into alliances of various forms are not mutually exclusive – in fact, they are two sides of the same coin,” said Jörn Stobbe, Chief Operating Officer and managing director at Union Investment Real Estate GmbH. He added that pilot projects were the most efficient way of getting to know each other. 

Overall, the study confirms that proptech startups are very much interested in cooperative partnerships with the industry, with more than 70 percent of respondents more or less actively seeking access to established players. In doing so, they place less emphasis than expected on access to big data, capital or regional markets as their main drivers for forming alliances. Tapping into the knowledge and expertise of large companies clearly plays a vital role (57 percent), but nearly 80 percent of the respondents indicate that it is large real estate portfolios, i.e. the assets themselves, that make cooperative partnerships attractive for proptechs (see graphic).

When asked about the most significant impact of new technologies in the real estate sector, the overwhelming majority of proptechs (67 percent) cite improvements in building performance. Startups are also confident that technology will have a positive impact on the decision-making processes of real estate companies (64 percent), deliver higher profitability (59 percent), allow faster transactions (59 percent) and enable greater customer loyalty (24 percent). 

Digital real estate of the future is also the focus of the Proptech Innovation Award, which has established itself as a successful international network giving young proptech companies access to innovative potential in the real estate industry. For the third time, Union Investment and GTEC are looking for the world's best digital solutions and concepts for the real estate industry. With prize money of €40,000, the award will be presented at the Proptech Innovation Summit in Berlin on 16 May.

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