The Australian PropTech sector is approaching a “tipping point” and will follow in the successful footsteps of the burgeoning local FinTech industry, according to BlueChilli’s head of partnerships.
PropTech, the name given to any technology-focused company targeting the property sector, is set for significant growth in Australia, with traditionally conservative and tech-adverse corporates now looking to get on board, along with investors around the world.
Australian real estate giant Stockland has just launched its own accelerator program for PropTech companies in partnership with BlueChilli. The program focuses on idea stage entrepreneurs, with $38,000 in funding given up-front to up to 15 startups and a potential further $500,000 on offer.
With increased focus around the world and a willingness from incumbent corporates like Stockland to embrace technology, PropTech is set to enjoy strong growth in Australia, BlueChilli’s Chris Ball said.
“There are a lot of big real estate companies coming to the realisation that there really is a need for action with a positive mindset,” Mr Ball told InnovationAus.com.
“There are some parts of the real estate industry that are a burning platform, but by and large they’re still doing pretty well. It’s action that’s motivated by burning ambition rather than a burning platform,” he said.
“Real estate as an industry has been quite slow to move into this space. It’s been quite slow to move relative to some of the industries – it’s at a point where the banks were maybe five to 10 years ago.
“But the movement from a corporate perspective into this space is now really coming in pretty hot. There has been a lot of legacy thinking within this space and a lot of resistance to change at a corporate level.”
Investors are beginning to support companies working in the space, and corporates are more open to embracing disruptive technologies.
“You need all those various dials to turn to the right settings within the ecosystem for really big things to happen. It’s all well and good for there to be great talent but if there isn’t access to capital and a real willingness from the corporates to participate then it’s really hard for entrepreneurs to get much done,” Mr Ball said.
The new Stockland accelerator program is an example of how a large incumbent can work to embrace new ideas and technology, Mr Ball said.
“The progressive big companies who come at this the right way will extract out the opportunities that exist, be it directly through collaborating with those startups or from learning from them and seeing how entrepreneurs can go from zero to a hundred in a matter of months when that can take a matter of years within a corporate.”
There’s a big opportunity for early-stage startups in collaborating with a big corporate rather than seek to disrupt them, he said.
Just like with the FinTech sector, there is a need for government support and changes to regulations to assist the growth of the PropTech sector.
“It’s naturally part of the conversation with any disruptive startup that may very well be acting outside the current legislative bounds. That governance layer is an important one in the context of PropTech.
“If you’ve got something which is an equivalent of Uber, like a logistics startup that is helping a business move goods around between their logistics centre and a retail outlet that is currently something that is outside what’s legal, then that’s challenging,” Mr Ball said.
This could be along the lines of the regulatory sandbox that the federal government offers for the FinTech sector.
“A startup which has an idea that is perhaps somewhere outside of the bounds of the existing legal framework, having some kind of assistance to be able to still test that in a contained environment could be a really, really interesting opportunity for government to get engaged an actually be a part of the piloting and testing,” Mr Ball said.
“Assistance around that end of the program could be really interesting.”