PropTech Industry Seeks out University Environments to Gain Early Market Acceptance of New Products

In the early days of Apple, Steve Jobs focused on the university environment to gain an early market share of new Macintosh products. Indeed, Apple invested heavily in the university environment, notably the Ivy League institutions, to introduce new products that subsequently became available to the public.

Several decades later, many property tech start-ups are following the Apple model by testing their products in the university environment and hoping to gain early acceptance, according to a panel of experts at SHURE Vancouver, held on April 20.

“Universities are a test environment for the larger environment. University campuses are kind of these little microcosms,” according to Nathan Elliot, Founder of FrontRunner Technologies, a PropTech firm that devises visual marketing technology for retail and office storefronts.

There is no shortage of capital for the PropTech arena today. The volume of investment in North American property tech startups increased from $5 billion in 2017 to $18 billion in 2021, according to a Houlihan Lokey industry report.

Property technology innovations are often related to climate control solutions, access control, security systems, internet connectivity, tenant screening and property leasing.

“We had a bit of softening in 2022 related to a few economic headwinds and some other factors that went on but that only tailed that investment factor back by, a factor of a third, so still over $12 billion of investment into the space across North America last year, according to Lynette Keyowski, Managing Partner of Reach Canada, a consultant for PropTech firms in Western Canada.

According to Keyowski, approximately one-third of investment in the property technology arena is focused on the multifamily sector, including student housing.

But how to grow a property technology solution concept from idea to mainstream business is a significant challenge.

“Our journeys are very simple,” according to Nathan Elliot. “It was friends and family money, and we used that opportunity to scale the business. And it's only recently, four or five years later, where we've done equivalent of a Series A fundraising amount.”

For Sam Mehrbod, CEO & Co-Founder of ROOMVU, initial growth came through family and friends, but relationships with larger players became important.

“We had to really get in there and start building relationships with bigger industry partners,” said Mehrbod. “The age-old approach to building a business; I think our format has been just making sure the values align and that the intention aligns between the two partnerships.”

Mehrod’s ROOMVU is an online platform that offers realtors ready-made videos with market updates and submarket updates to neighbourhood bio videos and tips for homeowners.

Sustainable Projects Group, a Calgary-based design-build energy efficiency firm is working with public-sector funding through the Canada Infrastructure Bank and other non-traditional capital sources to get millions of additional dollars for its clients to upgrade buildings.

“A lot of it comes back to us and our margins are little better, allowing us to keep investing in the software,” said Tayber Yastremski, President of Sustainable Projects Group.

Sustainable Projects Group is working with clients to hit carbon reduction goals by specializing in energy efficiency projects, such as LED lighting and control upgrades, lighting redesigns, high-efficiency boiler, and HVAC system upgrades, as well as maintenance and retro-commissioning of building systems and equipment.

Taking it back to the university and student accommodation environment, the panelists concluded that they could use their technology solutions to provide timely information on campus to better equip end-users of real estate from students, faculty, staff, and retailers.