MIPIM PropTech | It is often suggested that proptech ought to follow in the footsteps of fintech, which is considered to be five to seven years ahead in its maturity in the financial marketplace. Fintech entrepreneur Al Goldstein, despite having founded two $1bn businesses, believes it is the consumer markets that need to be followed, as that is where technology businesses have really transformed market places.
According to Goldstein, chief executive of online personal loan business Avant, whilst Amazon has fundamentally changed retailing, Netflix destroyed Blockbuster and Uber revolutionised the taxi business, banking is yet to actually evolve and fintech is still therefore just challenging the sector.
Evolution, said Goldstein, will come when the “long established who have been afraid to evolve will jump on board to invest in and adopt from the disrupters”. It is through partnerships, he explained, that security is provided to the startups. “The corporates aren’t technology businesses, so they can’t build it, buying it is often too risky, but partnerships are mutually beneficial.”
Alex Bailes, director and head of product for the UK and product engineering for EMEA at CBRE, feels that this could be a fundamental difference between financial corporates and their property counterparts. Bailes has the responsibility for looking at the entire spectrum of solutions available to the property consultancy, from partnering with startups or more mature tech companies, to developing software internally through their own in-house software engineering teams.
He explained: “Fundamentally what it comes down to for us is the solution that we are trying to find, something that genuinely adds value to our client relationships. If that is the case then clearly solving that is our secret sauce, so we will tend to look to build that in-house because it helps to differentiate us from our competitors. Partnering on a solution that has already been developed, then clearly our competitors can use it as well. That said, of course, there are sometimes opportunities for start-ups to take investment on an exclusivity basis or for us to make a full acquisition and bring them in-house.”
This latter approach is something that CBRE has undertaken in recent months, with the acquisition of Floored in the US, which is now being brought to the European market.
The reason, Bailes said, that CBRE can take the lead in developing its own tech solutions is because “we embed out tech teams within the business, so rather than having an us-and-them business with a tech team divided from the operational team, we form part of the business operating unit and can actually get under the skin of what they are trying to achieve and what problems they are coming up against.”
CBRE is perceived as one of the most corporate and traditional of the global consultancies; if as a business it is taking the leap in to investing in emerging tech, then maybe the revolution is closer than some may think.