Category: UNCATEGORIZED

Netflix has acquired the rights to make “Beverly Hills Cop 4” from Paramount.

Deadline, which broke the news, said the studio has been trying to restart the franchise in several forms, including a TV show.

Even with producer Jerry Bruckheimer and star Eddie Murphy attached to the sequel, Paramount might have been a little nervous about the film’s commercial prospects, especially since it’s been 25 years since the release of “Beverly Hills Cop 3.” And the studio (which will soon be part of the reunited ViacomCBS) has had a tough few months at the box office, most recently with the disappointing performance of “Terminator: Dark Fate.”

Plus, Paramount and Netflix were already been working together, first with Netflix buying “The Cloverfield Paradox” and the international rights to “Annihilation,” and then with a multi-picture deal between the two companies announced at the end of a last year.

Murphy, meanwhile, has been getting some of his best reviews in decades for his performance in the Netflix film “Dolemite Is My Name.”

Lyft is making 200 new long-range EVs available to rideshare drivers as part of its Express Drive program, the company revealed today. Express Drive is a program that Lyft offers to provide rental cars to drivers on its platform, as an alternative to options like long-term leasing. Express Drive members get unlimited miles, as well as included insurance, maintenance and roadside service, with the ability to return the car after a rental period of as little as just a week.

These 200 new EVs (all Kia vehicles for this particular deployment, Lyft tells me) will be available to Express Drive Lyft drivers in December, and the rideshare company says that this is “the largest single deployment of EVs in Colorado’s history” – and there’s good financial reasoning for the timing of Lyft’s introduction of the program – in May, Colorado Governor Jared Polis signed a bill into law that provides rental programs for rideshare operators with the same incentives that it provides consumers at the state level: as much as $5,000 per car purchased.

EV deployments of this nature have benefits across all aspects of the rideshare economy: Lower operating costs for drivers are one immediate effect, for instance and Lyft says that it’s seen costs drop between $70 to $100 for drivers on average based on existing EV fleet deployments in both Seattle and Atlanta. For cities and residents, it’s obviously beneficial in terms of lowering net emissions resulting from cars on the road. The jury is still out on whether rideshare and ride-haling programs ultimately decrease the total number of cars on the roads, but if programs like this can speed the adoption of EVs and ensure they represent a higher percentage of the mix of vehicles that are driving around cities, that’s a net win.

Large fleets of EVs in operation also provide incentives for infrastructure operators to ensure that there’s a good charging network on the ground for these vehicles to take advantage of. That, in turn, means that the infrastructure is present for consumers to take advantage of, which helps with the general EV adoption curve.

Lyft also says it’s aiming to “electrify more of the Lyft fleet each year moving forward,” so expect additional cities and fleet deployments to follow as it works on those goals.

Google today announced that it has finished the install and test of its private Curie cable. When it was announced, Curie, which connects the U.S. to Chile, was the company’s third private cable. Since then, it has announced two more, Dunant and Equiano, which will connect the U.S. to Europe and Portugal to South Africa. The 10,500 kilometers long cable will offer a total capacity of 72Tbps and will go online in Q2 of 2020. Right now, Google’s teams are working on connecting the cable to its own network.

In addition, Google also today announced that Curie will get a branch to Panama. “Once operational, this branch will enhance connectivity and bandwidth to Central America, and increase our ability to connect to other networks in the region, providing resiliency to our global cloud infrastructure,” the company says in today’s announcement.

For Curie’s Panama branch, Google will once again work with SubCom, the same engineering firm that helped it build the rest of the cable. SubCom is also working with Google on the Dunant, while Google opted to partner with Alcatel Submarine Networks for the Equiano cable to South Africa.

While Google is also partnering with other technology firms to share bandwidth on other cables, these private cables give it full control over all of the resources. The company also argues that owning and operating its own cables adds another layer of security, on top of all the other benefits.

In part two of our survey that asked top VCs about the most exciting investment areas in real estate, we dig into responses from 10 leading real estate-focused investors at firms that span early to growth stages across real estate specific firms, corporate venture arms, and prominent generalist firms to share where they see opportunity in this sector. (See part one of our survey.)

In part two of our survey, we hear from:

• Connie Chan, Andreessen Horowitz
• Brendan Wallace, Fifth Wall
• Niki Pezeshki, Felicis Ventures
• Hans Morris, Nyca Partners
• Mihir Shah, JLL Spark and JLL Technologies
• Casey Berman, Camber Creek
• John Helm, RET (Real Estate Technology) Ventures
• Nima Wedlake, Thomvest Ventures
• Travis Connors, Building Ventures
• David Bates, Tamarisc Ventures

Connie Chan, Andreessen Horowitz

What trends are you most excited in real estate tech from an investing perspective?

While most people think about real estate tech from the transaction perspective, I believe that every single part of the real estate value chain is ripe for disruption. On the construction and home maintenance side, we are facing an aging population of contractors, electricians and plumbers. As fewer people enter the trade, this is a great opportunity for a startup. Rentals are offline and fragmented, with the majority of renters still paying their rent with cash or check.

As low-interest rates hold, many homeowners could be refinancing their homes, but aren’t simply because of the lack of financial education. People want to live in beautiful spaces, but everyone needs help with the design and remodeling process. Younger generations in particular are shocked and lost when they learn how many vendors and contractors they need to interface with for a simple bathroom or kitchen remodel. At the end of the day, we end up having to go back and forth with service providers in person because there are major information gaps online, just like in medicine. It’s hard for homeowners to know who to listen to and who to trust.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right? 

A third of my time is spent thinking about startups tackling real estate — this includes everything from construction to financing to rentals and home improvement. The amount of money spent in real estate is enormous, and the data and tools we use today are still based on insights from a decade ago.

When I polled colleagues on what they would do if a toilet broke, the answers ranged from: Google, YouTube, Yelp and “calling my mom.” We spend so much money on the way and place we live, and it’s nuts that there isn’t more technology to support it. Yes, we turn to Zillow or Redfin when searching for a home to buy or rent, but what about everything that happens before and after that?

The market is not over-heated in the least. However, I do believe investors are starting to treat real estate tech companies differently than tech-enabled real estate companies. In the past few years, that nuance was less clear, but recent market events have forced investors to focus more on gross margins and software’s ability to scale.

Are there startups that you wish you would see in the industry but don’t?

I’d love to see more companies foster community. Decades ago we hung out with our neighbors, but today, many of us can’t even recall their names. Technology can help connect residents in a building, or neighbors down the street — mapping out our geography-based social networks. I’d also love to find more companies that are using different kinds of signals to assess risk, whether it’s to replace the credit score for a rental screening or to help someone qualify for a mortgage. Chinese fintech companies in particular have been experimenting with using other signals besides a credit score to evaluate how responsible someone might be.

Plus any other thoughts you want to share with TechCrunch readers

If we think that the transportation industry is big, just wait until we realize the size of the real estate market!

Brendan Wallace, Fifth Wall

How has the real estate technology ecosystem changed in the last 3 years? 

When we started Fifth Wall three years ago, VCs and even prospective LPs would frequently ask us ‘What does real estate technology mean? Isn’t that very niche? How are you going to invest $212 million into real estate technology? ” At the time those felt like legitimate questions; in retrospect, they reflected that the venture ecosystem hadn’t truly appreciated the enormity of the opportunity in real estate technology. The fact that those questions felt valid only a few years ago tells the story of how the real estate technology ecosystem has evolved, expanded, and institutionalized.

In the last three years, real estate technology has arguably created more enterprise value and spawned more unicorns than any other single industry sector in venture capital. Fifth Wall was fortunate to make early investments in many of those transformative businesses, such as Blend, Hippo, Loggi, Lime, Opendoor and VTS. In the first half of 2019, $14 billion was invested into real estate technology from the VC community. Even though Fifth Wall’s newest $503M fund is the largest in the category, it nonetheless represents a very small percentage of total venture capital invested into real estate technology.

What spawned this growth in real estate tech over the last 3 years? 

It’s not surprising that technology for the real estate industry would become one of the largest and most attractive categories of venture capital. Real estate is the single largest industry in the U.S., yet historically has been one of the lowest spenders on IT. The industry was (and to a great extent still is) known as being a late adopter of technology solutions. I would characterize the last five years as being an ‘Age of Enlightenment’ for major real estate owners, operators, and developers: CIOs were hired for the first time, large IT budgets have been allocated and are growing, and almost every major real estate owner now recognizes that adoption of new technology is existentially critical to their future strategy.

In part, this realization explains the dramatic growth in the number of corporate investors in Fifth Wall: just two years ago Fifth Wall managed $212M from nine North American real estate corporates, today we manage over $1 billion invested by more than 50 corporate strategic partners from eleven countries. To put it simply, when the world’s largest industry suddenly decides to adopt technology, you can expect a lot of value to be created. And it’s only just begun.

Are generalist VCs investing more in real estate technology? 

Generalist VCs have been pouring capital into real estate technology companies, especially in the last few years. However, not all of those investments have performed well, and there’s usually one simple reason for that: distribution is absolutely everything for real estate technology startups. Getting large real estate corporates to adopt a new technology is often deterministic. In addition, generalist VC firms typically lack the deep real estate relationships and domain expertise to drive distribution and adoption of emerging technologies.

This is why Fifth Wall raised its capital from the largest partners and customers of the very technologies in which we’re investing. Fifth Wall wanted to be the connective platform to link new, emerging real estate technologies with the corporate partners that could serve as the commercial distribution lanes for them globally. A perfect example of this would be the strategic partnership and investment Fifth Wall orchestrated between homebuilder Lennar, one of Fifth Wall’s strategic investors, and Opendoor.

Are more real estate corporates forming their own venture capital arms?

There are more CVC (corporate venture capital) arms at real estate companies than there were three years ago, but they haven’t generally performed well, strategically or financially. Real estate organizations can be especially slow-moving and bureaucratic, making it difficult to attract great venture investment talent. CVC is inherently hard to execute well — in any industry — and for an ‘Old World’ industry such as real estate, CVC arms seem especially challenged.

Fifth Wall is increasingly finding that real estate owners are electing to become a part of the Fifth Wall consortium as we can now offer more distribution to any startup that any single corporate investor can offer investing on their own. Similarly, public market investors also have become critical of publicly-traded real estate corporates starting their own venture arms and have instead favored large real estate investment trusts (REITs) investing in consortium-based funds like Fifth Wall and others. I would expect this trend to continue as more real estate corporates are looking to partner with dedicated consortium-based real estate technology funds as opposed to maintaining their own CVC arm.

What trends are you most excited in Real Estate tech from an investing perspective?

We think there is a profound and exciting opportunity right now at the intersection of real estate technology and sustainability. Real estate owners are incredibly exposed to sustainability risks: the industry consumes 40% of all energy globally, emits 30% of total carbon dioxide, and uses 40% of all raw materials.

There is significant and growing regulatory pressure at both the local and federal levels to make all buildings net-zero carbon: look to Los Angeles and NYC’s recent legislation for two salient examples. Consumers and tenants of buildings are increasingly demanding heightened environmental standards for real estate assets. And finally, institutional investors are increasingly imposing sustainability requirements around their capital deployments.

Meeting the demands of stakeholders (regulators, tenants, and investors) is going to be an extraordinarily heavy lift for the real estate industry over the next decade, and effectively leveraging technology and innovation to drive solutions at scale is going to be crucial in order to meet these goals. Taken together, I believe the technologies to create more sustainable real estate assets represent a $1 trillion opportunity over the next decade.

Niki Pezeshki, Felicis Ventures

Felicis Ventures is an early-stage venture firm in the Bay Area that is currently investing out of a $300mm fund. We’ve made multiple investments in the real estate tech space over the last few years, including Opendoor (instant online home buying/selling), Juniper Square (investment management software for real estate), Modus (tech-enabled title & escrow company), Hippo Insurance (online home insurance), Quartz Robotics (construction robotics), and many more.

I led the Series A for Modus in mid-2019 and I’m on the board alongside Pete Flint from NfX, who was the founder of Trulia. We got excited about Modus because they are bringing new technology to a market where the two largest companies, Fidelity National Financial ($13bn market cap) and First American Financial ($7bn market cap), were both started in the 1800s (not a typo!). By creating a better closing experience for real estate agents, buyers and sellers, and also for the actual title and escrow officers that are doing the day-to-day work, Modus can take significant market share from these two large incumbents.

Broadly speaking, real estate tech feels over-heated given where we are in the economic cycle. I see multiple companies whose business models work great when real estate prices are going up, but will almost certainly get squeezed in a weak pricing environment. If I feel like a real estate business model has a limited margin of safety in a downturn, it’s typically a quick pass for me. The tech needs to be addressing an area within real estate that I think will see secular growth (ie less variability based on housing/rental prices).

I’ve also been surprised to see how many copycat companies continue to get funded at high valuations. It’s tough for me to envision a world where the 4th or 5th version of Opendoor or the 4th or 5th version of Sonder can return significant returns to investors. As a result, I’m really focusing on fresh ideas where there is a clear ‘why now’ or there is a unique business model innovation that I think may lead to a category-defining company. If my investment will have 4 to 5 clones in 2-3 years, I’ll know I was onto something (hopefully it’s defensible enough that it can fend off the competition though!).

My dad owned a restaurant for 30+ years and so I’ve always been partial to startups working on problems for small businesses with physical locations. It especially hits me hard when one of my favorite shops and/or restaurants in my neighborhood in SF closes down due to rent increases (even though the business was loved by the community and was quite busy). If there are startups out there with a unique business model that are helping small businesses stay open longer, I’d love to chat.

Hans Morris, Nyca Partners

There is still so much that technology can do to improve the experiences and performance for real estate lenders, borrowers, and investors. Our first investments in 2014-15 focused on digitizing archaic processes within the legacy financial world, leading us to early investments in Blend and Built, and enabling efficient investment into single-family rental housing through the Roofstock platform. It’s now clear that everyone’s expectations have been raised, and we expect accelerating digital process adoption throughout the value chain. No one says I prefer the old paper process!

There is considerable investor attention on shared ownership structures to enable more efficient home purchasing and unlocking home equity. Ribbon provides home buyers, sellers, and agents a guaranteed close, with software to help guide the process. And it’s very clear to us that new data tools can enable more efficient underwriting/investing in commercial real estate, like Skyline.ai, or more efficient underwriting of single-family risk, like Polly-ex.

Mihir Shah, JLL Spark & JLL Technologies 

I joined JLL to lead its strategic venture fund JLL Spark in 2017. Over the course of the last two-plus years, I’ve seen commercial real estate go from treating technology as a curiosity to a business imperative. Adoption is soaring, in fact, more than 60 percent of JLL’s top investor clients use at least one of JLL Spark’s portfolio company technologies. With that context, it’s no surprise that JLL decided to double down on its approach to proptech, forming JLL Technologies, the newly aligned division to build and expand our technology products and services for our clients and ourselves. At JLL Technologies, our mission is to enhance the liquidity of the world’s buildings while improving the happiness and productivity of those who occupy them.

A best-of-breed software stack is emerging for commercial real estate investors and property managers, and it’s impacting virtually every aspect of commercial real estate – from transactions and construction management, to facilities management and tenant experiences, to space utilization and building efficiency.

One trend we’re seeing is a strong push to digitize building operational data to gain insights and learnings from institutional knowledge in the commercial real estate lifecycle. Buildings produce a ton of data, and people are beginning to ask themselves, “how do we use it?” As a result, we’re interested in companies with a data-driven approach. For example, Dealpath provides real estate investors and development teams deeper visibility into their acquisition pipeline with the data analysis to maximize value at scale . Skyline AI is another great example of a company using machine learning and AI to help real estate investors leverage data to make more informed decisions. It uses a mix of proprietary and public data sources to create incredibly accurate valuation models and even acts as an investor itself.

As tenants demand more from building owners and property managers, tenant experience is another area ripe for opportunity. The modern workforce wants the technology-enabled experience they are accustomed to at work. This is putting more pressure on employers and property managers to deliver premium digital experiences tied to building amenities. Understanding how tenants are engaging with their space can lead to improved tenant retention and higher net operating income. While JLL’s virtual workplace assistant Jill aims to improve daily workflows, HqO and Livly are great examples of companies delivering value to tenants with on-demand app experiences, with HqO seeing 60 percent of tenants engage with its app in the first 12 months with zero landlord turnover to date.

Every day billions of people show up to work, live, or shop at commercial real estate assets. The impact of this technology is almost immeasurable, and I believe adoption will only continue to accelerate as investors and occupiers start to realize the ROI and benefits of proptech.

Casey Berman, Camber Creek

What trends are you most excited in Real Estate tech from an investing perspective?

One of the most dynamic areas for proptech investing right now is the multifamily space. Multifamily owners and operators are looking for new tools to increase tenant engagement, improve the tenant experience, streamline operations, and identify new revenue streams. For example, we are seeing a dynamic group of new concierge services, package delivery companies, tenant engagement apps, and the like. Camber Creek is proud of our work with WhyHotel, an alternative lodging service that operates pop-up hotels in newly built, luxury apartment buildings. Similarly, we are excited about our portfolio company Nestio, a multifamily marketing platform which offers an automated leasing experience.

We are also seeing a trend of companies that are combining technology with business process innovations to offer new services to business and consumers. For example, Camber Creek portfolio company Curbio is a tech-enabled ‘one-stop-shop’ for pre-sale home renovation. Curbio’s technology stack provides design, scoping, pricing, communication and scheduling tools to dramatically streamline the renovation process. Curbio also finances the remodel for the customer. Curbio’s model gives homeowners who lack the cash or wherewithal the opportunity to renovate and maximize the value of their homes, often their largest asset. Curbio is expanding rapidly around the U.S. and is already among the 550 largest home renovators in the country.

How much time are you spending on Real Estate tech right now? Is the market under-heated, over-heated, or just right?

Camber Creek is the premier proptech venture capital firm in the U.S. We were founded in 2011 and all we do is real estate technology. Our portfolio includes companies like VTS, Latch, Compstak, Rabbet, TaskEasy, Building Engines, Measurabl, Bowery Valuations, and others.

Real estate is the largest asset class in the world and the real estate industry has historically lagged other industries in adopting technology. There is a long runway for technology innovation and adoption in the real estate industry and we think the market for proptech is just beginning to hit its stride. For example, going back to the trend of tenant engagement, a recent Deloitte survey of 750 real estate executives found that 92% of respondents plan to maintain or increase their tenant experience-related technology investments.

Are there startups that you wish you would see in the industry but don’t?

That’s not really how we think about it, but there are some areas in which we are excited to see new energy and growth. For example, there is a cohort of companies finding creative ways to make housing more affordable, like PadSplit and Nesterly, which help homeowners rent out spare bedrooms or split up their homes into apartment units, in the process creating new low-cost rental inventory.

We think there is a lot of opportunity to bring new technology into the retail experience, from in-store augmented reality to systems that automatically check a consumer out (rather than waiting in a check-out line). Finally, the ‘smart home’ and ‘smart apartment’ landscape is changing rapidly and we believe the winners will be companies that can control the platform – i.e. how a homeowner or tenant accesses and controls the full range of smart home products.

John Helm, RET (Real Estate Technology) Ventures

What trends are you most excited in real estate tech from an investing perspective?

Proptech investment has skyrocketed over the past two years as the $3.5 trillion commercial real estate market undergoes its much-needed digital transformation. If you look at the data, however, most of the money is being funneled into three primary buckets: construction (e.g. Katerra), residential real estate (e.g. Compass), and co-working (e.g. WeWork). Rental property owners representing more than 40 million units just in the US are largely being ignored by the investment community. This is why we’re excited about rent tech, which we define as any technology used to power multifamily or single-family rentals.

Large multifamily and single-family rental owners and operators are increasingly adopting technologies that streamline operations and improve resident experience to differentiate themselves in an ultra-competitive environment. Residents’ tech-enabled lifestyles are pushing rental owners to modernize their buildings and offer new amenities that simplify their residents’ lives. This includes everything from basic infrastructure needs like enabling Internet access throughout buildings, to smart home automation and customizable fully furnished units.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right?

We are focused solely on helping build cutting-edge real estate technology companies for the multifamily and single-family rental industries. Our view is that rent tech represents a substantial sub-category within proptech that hasn’t received a lot of attention, and thus we are aggressively pursuing it with the help of our limited partners that include more than 20 major multifamily organizations such as Essex, UDR, Starwood, Progress Residential, MidAmerica, Aimco, and BH Management, which collectively own and operate more than 1 million rental units in North America.

We think the market for proptech and rent tech is just about right. Valuations for prop-tech companies are generally high right now, but mainstream investors have cooled slightly because of some high-profile misses, namely WeWork. Deals will likely become more competitive when successful exits by proptech and rent tech companies take place more regularly.

Are there startups that you wish you would see in the industry but don’t?

We work closely with our LPs to identify pain points and evaluate the top technologies in the market. By working directly with rent tech companies’ customer base, we can reduce the risk of our investments and deliver better returns.

Specifically, rental property owners are focused on the following areas:

• Smart Home Automation: There’s been a lot of talk about a potential recession in 2020 which is why we’re bullish on smart apartment technology. Rental property owners can use the technology to streamline maintenance operations, improve resident experience, and create new revenue streams. Multifamily and single-family organizations cannot utilize consumer products off the shelf as they need a secure enterprise layer to control these devices from an operations perspective. The best companies, such as Smart Rent, provide a back end system that the property owner can leverage to realize operating efficiencies from access control and vacant unit utility management, as well as improve asset protection through leak detection. They also integrate with leading property management systems to the new resident is automatically provisioned and can take over the system when they move in. Once the resident is in control of the system, the best systems then only keep resident data for the resident and purge it from the system regularly.

• Furniture-as-a-Service: Millennials are delaying home-buying and resistant to continually purchasing and moving furniture, so furniture-as-a-service companies are offering short-term solutions to help save consumers money while offering access to beautiful pieces from major brands like CB2/Crate&Barrel, Floyd, Campaign and more. Rental property owners are incorporating these services into the onboarding process so people can move into a fully furnished apartment, or just pick up a couple of nice pieces for their new home.
• Tech-enabled Amenities: As people have become used to high-end experiences from hotels and short-term rentals, a thriving marketplace of tech-enabled services has popped up to deliver those amenities safely and securely for renters. For example, many multifamily organizations now offer apartment cleaning, dog walking, and dry cleaning services to all of their residents. It’s no longer enough to have a beautiful building in a prime location – rental property owners have to create value for their residents if they want to hold onto them.
• Digital Management Tools: We’ve seen an increasing number of online tools pop up that help digitize previously paper-based forms and processes. We expect to see consolidation in this market comprised primarily of point solutions so this market will be exciting to watch.

Nima Wedlake, Thomvest Ventures

What trends are you most excited in real estate tech from an investing perspective?

We’ve witnessed a flood of startups developing new approaches to financing homes. These can take many flavors: rent-to-own (Divvy Homes, ZeroDown), co-ownership (Unison, Point), debt-free buying (Haus), or equity release (Figure, Patch Homes, EasyKnock). These models are designed around a few core tenants:

Increase access to homeownership: Following the Great Recession, availability of credit to homebuyers has tightened: the average FICO score for conventional loans in July 2018 was 751, more than 100 points higher than average scores from 2004 to 2006. This has resulted in a home ownership rate that is particularly low among millennials — only one-third of Americans under 35 own a home. Startups in this space have the potential to lower the barriers to entry without overburdening home buyers with debt.

Better distribution of risk: Incorporating equity partners into the home finance ecosystem means better risk-sharing for the entire economy. This means that when house prices rise or fall, both would share the benefits or the burden. Financial contracts incorporate better sharing of risk will ultimately help avoid housing bubbles and make market crashes less severe.

Provide more flexibility to homeowners: Limited housing alternatives often tie individuals to a location and a job, which limits geographic mobility — adults in the U.S. are moving at an annual rate (10%) that is at its lowest since the US Census Bureau began collecting the data in 1946. New home buying models can achieve the right balance of delivering the benefits of ownership while providing buyers with a degree of flexibility not present in traditional debt contracts (mortgages).

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right?

We’ve historically been active financial technology investors, and over the last 18 months we’ve been spending meaningful time in the real estate tech vertical. There are many overlapping qualities between these two sectors: large market opportunities, slow-moving incumbents, growing consumer demand for technology products, and better data with which to price risk.

We’ve also been impressed by the quality of entrepreneurs building companies in the real estate category. Many are technologists who may not have spent their careers in real estate, but have personally experienced its inefficiencies as buyers or sellers of homes.

While we are excited about the market opportunity and the flood of talent moving into the sector, we also are keeping a close eye on how technology companies manage the inherently offline aspects of real estate. This asset class is operationally and capitally intensive — scaling businesses require building large teams and lots of venture capital. And in many cases, companies have struggled to prove that software can drive meaningful efficiencies in a business (see WeWork). Finally, we are spending a lot of time thinking about how “recession-proof” these tech-enabled businesses are, given that many of them were founded following the Great Recession and have yet to experience a negative housing cycle.

Travis Connors, Building Ventures

There is no greater challenge, and therefore opportunity, than successfully supporting the additional 2.5 billion people who will inhabit our world over the next 30 years (90% of them in cities). Accommodating this growth will require completely rethinking how we design, build and operate our physical world, the built environment, to provide an optimal experience for everyone. To put this in perspective we need to build the equivalent of a new New York City every single month. Meanwhile, our existing built environment consumes too much energy, produces too much pollution and is inefficiently utilized.

Our mission – and litmus test – is to invest in entrepreneurs leveraging technological innovation to deliver “A Better Built World”. We invest exclusively in opportunities across the continuum of the built environment, inclusive of what traditionally has been considered ConTech and PropTech. It’s no secret that the construction and real estate industries have historically been plagued by tremendous inefficiencies and lagging in innovation. The way we reinvent the design, construction, and operation of our buildings has major implications on our world’s most critical challenges including productivity, sustainability, resiliency, affordability and more. Clearly, we believe there are more than enough exciting and rewarding opportunities in this space to dedicate 100% of our time and capital here.

We are at the vanguard of a generational shift driven by three meta trends that will define the future of the built environment, “constructuring”, “autonomous building(s)”, and “space as a service”. All three are critical components to thinking of the Built Environment as a System for Living. Constructuring is the process by which we transform construction into something more akin to manufacturing. Portfolio companies such as Hypar, Join and Smartvid.io are indicative of this paradigm shift.

Another pillar of our thesis is autonomy of building and buildings. It’s pretty simple to understand how autonomy plays a significant role in the construction of buildings (think: Built Robotics’ autonomous excavators), but how do we think about the autonomy of the buildings themselves? Buildings like Dock 72 in Brooklyn’s Navy Yard and The EDGE buildings are already making advances in building intelligence with new construction. Retrofitting existing “dumb” buildings is an even greater challenge with the opportunity for outsized impact. Autonomous Buildings leverage the vast power in IoT, ML, and AI to help buildings manage and configure themselves to deliver optimal utilization and experience. Our investments in Blokable, Dandelion Energy and 75F are examples of this trend in action.

And “Space as a Service” will enable greater flexibility, utilization and use options to deliver what occupants want and need. We see ample opportunities for technology to be a critical driver to create and enable vastly better experiences for occupiers of commercial and residential real estate. We expect the digital transformation driven by construction and real estate technologies to continue through and beyond 2020, especially as more and more stakeholders across the value chain realize the mutual benefit of early and continuous collaboration throughout a building’s complete lifecycle.

David Bates, Tamarisc Ventures

The first wave of innovation in the real estate technology sector was around business models. After the recession, a confluence of factors opened up a new field of disruptive possibilities: the push for more sustainable buildings; the spread of the Internet of Things (IoT) technology related to smart homes and offices; the rise of Millenials and the proliferation of the sharing economy and social media; the increased prevalence of smartphone use and the resulting plummet of sensor costs; and the advent of Big Data.

Many early movers in real estate tech-focused too heavily on topline growth without adequately emphasizing unit economics and market fluctuations; the outcome of this imbalance will no doubt be seen in the next recession. Early financing came relatively easily, with little scrutiny, and often at unjustified valuations. Flush with funds, many first-wave companies used expensive venture capital dollars to subsidize customer purchases and took on high fixed costs that resulted in poor or negative unit economics. While this may have worked for a few, the majority of companies have ended up — or will end up — compromised.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right?

This imbalance also led to a growing chasm between early-stage financing and more established venture rounds (Series A and beyond). Because so many companies were able to obtain abundant funds at early rounds, Series A financings today are exceedingly competitive and highly scrutinized. At the Series A stage, VC firms are now expecting around $2 million in annual recurring revenue (ARR), greater than 100% annual growth, and strong SaaS metrics to consider a company a real contender. The upside for those companies that meet these tough standards is that valuations are favorable, as are check sizes. But the downside, for those who don’t, is the dilution, distraction, and cap table complexity that accompanies companies’ efforts to retool their business along the arduous road to Series A.

In addition to unit economics, entrepreneurs in real estate tech must also focus on capital efficiency as they dial in product-market fit; otherwise they risk raising multiple, highly-dilutive seed rounds. Rather than merely tracking customer acquisition cost (CAC) — which taken alone can hide inefficiencies — we are constantly watching how much it costs to acquire one dollar of ARR. We encourage companies to do the same. It pains us to see hardworking founders holding only single-digit equity by the close of Series A.

What trends are you most excited in real estate tech from an investing perspective?

For the most part, the first wave seems to have run its course — with the exception perhaps of Construction Tech, whose first wave still seems a ways from its crescendo. But the sector generally has matured; gone are the days when a single feature could grab immense market share and turn itself into a solution. Real estate professionals are bought in; larger firms are even hiring Chief Technology Officers. In today’s marketplace, platforms prevail, and startups designing features are little more than R&D laboratories for dominant players. Innovations must now build on the digital foundation laid by the first wave to deliver valuable analytics and business intelligence to more informed and demanding customers.

The second and more sustainable wave is on the horizon and it’s as much about technical as business model innovation. Weaning practitioners from spreadsheets, clipboards and as-builts and transitioning them into the cloud is no longer enough. And customers are no longer satisfied with sensor technology that merely tells them how many people are occupying a space; they now want to know what those people are doing, how they are feeling, and how they are interacting with each other and with their environment.

Ultimately, customers are looking for information that does one of three things: (1) helps their business to increase access to or utilization of an asset to boost topline revenue; (2) increases efficiency of resources (e.g., people, energy, space) to boost their net operating income; and (3) uplifts the user experience in a way that allows the customer to carve out a competitive advantage and support pricing premiums. Companies that satisfy all three of these criteria — like Bode, Bevi, and Getaway from our inaugural fund — have been able to really stand out and thrive. This trifecta is becoming more the norm and nowadays real intellectual property should also be part of a company’s value proposition.

Companies riding the second wave of real estate technology use the latest advances in machine learning and artificial intelligence (AI) technology to analyze data that is collected either passively from the built environment or through the course of business, to deliver deeper, actionable insights that can be both predictive and prescriptive. An example of such a company in our current fund is Northspyre. Northspyre’s cloud-based intelligence platform is a full-fledged solution that allows its customers to efficiently and effectively track the progress of a wide variety of capital projects and anticipate issues before they occur — resulting in significant cost savings and more informed decision making.

Its advanced data architecture enables a platform for the creation of seemingly endless value-adding products and features, ultimately providing customers with ever-increasing, long-term value. Another example is Bite, whose AI-powered food & beverage digital ordering platform (which can be incorporated, for example, into automated ordering kiosks in stores) has resulted in greater customer access, a higher average order value, lower staffing costs, and improved user experience. Bite’s analytical engine can optimize market understanding for quick-service restaurants and provide guests with recommendations based on their unique food preferences and dietary restrictions.

Are there startups that you wish you would see in the industry but don’t?

At Tamarisc we are looking to work with companies that are part of this second wave of real estate technology. We are particularly excited about the convergence of healthcare with the built environment through technology and business model innovations; we have a vision of the built environment as an extension of the healthcare professional. We anticipate that the best digital health models; those like Huckleberry Labs that use AI to drive efficiency factors related to expensive and geographically constrained healthcare professionals to increase patient access, lower per-patient costs, and improve the standard of care – will begin to merge into the built environment.

Technology platforms that work seamlessly through ambient computing in the built environment have the potential to bring the healthcare professional into the daily lives of individuals to optimize the healthspan of the population, reduce overreliance on medications, and drastically reduce the cost of healthcare in general. The built environment is already collecting scores of longitudinal, in situ data on its occupants; now is the time to translate that data into higher value, actionable intelligence for the betterment of society.

The multi-trillion dollar global real estate market is getting flipped on its head.

Business model innovation, data accessibility and the proliferation of mobile, SaaS and other cloud-native software have already given rise to a cohort of tech unicorns that sit amongst the world’s most influential real estate companies. Emerging technologies and growing capabilities across machine learning, 5G, IoT and more — coupled with fast-moving regulations and dramatic cost structure changes — have opened up opportunities for the next wave of innovation across a wide set of multi-billion dollar real estate verticals and sub-verticals.

And despite WeWork’s implosion garnering countless headlines in the real estate and technology worlds, venture dollars are continuing to spill into real estate tech (or proptech) companies at a rapidly increasing rate. Just upwards of $16 billion in venture capital has flowed into real estate-related startups in 2019 alone, according to data from Crunchbase and Pitchbook, with major fundraises happening across industrial, commercial, residential, and financial categories.

If we follow the money, it’s clear that more and more leading VCs are turning to real estate tech or proptech for ripe opportunities for juicy returns and disruption on a global scale. Given the countless subsectors where exciting new startups are popping up, we asked more than 20 leading real estate VCs who work at firms that span early to growth stages to share where they see opportunity within the colossal real estate category. For purposes of length and clarity, responses have been edited and split up into part one and part two of this survey (in no particular order). In part one of our survey, we hear from:

• Zach Aarons, MetaProp
• Pete Flint, NFX
• Ryan Freedman, Corigin Ventures
• Constance Freedman, Moderne Ventures
• Tyler Sosin, Menlo Ventures
• Jeff Crowe, Norwest Venture Partners
• Micah Kotch, URBAN-X
• Merritt Hummer, Bain Capital Ventures
• Kia Nejatian, Plug and Play Tech Center
• MJ Cootsona, Plug and Play Tech Center
• Robin Godenrath, Picus Capital

Answers have been edited for length and clarity.

Zach Aarons, MetaProp

What trends are you most excited in real estate tech from an investing perspective?

We like to track trends that play out in the broader real estate markets. Due to low interest rates and cap rate compression, real estate investors are now looking for yield through investments in non-traditional asset types. Industrial real estate has performed very well over the last few years, and we see a push toward workforce housing, medical real estate, and senior housing. We are looking at investing in technologies that benefit processes within these non-traditional asset classes.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right?

We spend 100% of our time on real estate tech (proptech). The market is definitely hot, but the addressable markets are enormous and adoption is still relatively low and accelerating. We believe that now is a good time to invest in early-stage proptech, provided it’s done prudently.

Are there startups that you wish you would see in the industry but don’t?

We would love to see more startups in the material sciences sector. Innovations like steel, bricks, timber, glass and reinforced concrete are hardly new, and they are still the predominant building materials of today. There have been minor advances like cross-laminated timber; however, we are looking for fundamentally new materials to bring into the building trades.

Plus any other thoughts you want to share with TechCrunch readers.

Proptech is the most fun sector in the world. No other sector shares the complexities and idiosyncrasies of technology that has to be applied to the built world. We are very lucky we get to do what we do.

Pete Flint, NFX

Real estate is the biggest asset class in the world by far, but the products available and service proposition surrounding it are still in the early stages of tech adoption. I see at least three major areas of opportunity for startups in real estate tech.

First is the real estate transaction process. Starting around 2005, companies like Trulia and Zillow, transformed the consumer research experience and home buyers increasingly began their search online. But the transaction itself spanning brokerage, financing and closing remains largely analog, complicated and inefficient. There’s an opportunity for startups to provide innovative solutions to help simplify and digitize the transaction process. Example companies in this area are Ribbon and Modus.

Second is the rise of alternative (or professionalized) living arrangements. I see a big opportunity for startups with a strong technology component to provide solutions for the mismatch between the way consumers want to live today and the aging housing supply that was built for a previous era with different needs and demographics. Companies like Lyric and Zeus are building alternative living solutions with a vertically-integrated short term rental strategy, while co-living startups are providing long-term rentals with value-added services.

Third is spend around the home. The large costs in time, effort, and money of designing, building, and maintaining a home provide an opportunity for tech-enabled solutions in construction, home management, and home maintenance. For example, Setter is providing a better consumer experience for requesting home maintenance services while Constru is bringing AI and machine vision to lower prices and reduce schedule overrun on construction sites. I see many more opportunities for startups like these in this space.

While these are big opportunities, the challenge with investing in real estate tech is to find startups with teams that not only have world-class product and software capabilities, but also world-class knowledge of finance, real estate, and operations. And with the recent WeWork debacle, we have seen a renewed emphasis on the failings of low-margin businesses. So for PropTech startups that are looking for funding today, there’s an increased need to demonstrate good unit economics and long-term margin potential.

Ryan Freedman, Corigin Ventures

At a high level, I believe we are still in the early innings of proptech – maybe 3rd or 4th inning. I always like to make the comparison to fintech. Technically speaking, real estate is a larger asset class than financial services. Between 2013-2017, fintech had cumulative funding of $62.4B vs. proptech’s $10.1B. Even though proptech has ramped up the last few years, we still have a long way to go prior to catching up. In addition, you may recall that PropTech used to be a “sub-sector” of fintech prior to being its own behemoth category. There are several subsectors within PropTech today, that I think a few years from now will be their own categories – construction tech is one of those.

From an investment perspective, we’re spending a lot of time in construction tech right now. From a macro standpoint, we feel there is a supply-demand mismatch with respect to the size of the market and the amount of funding in the space. Construction accounts for ~$10T annual spend globally and employs ~7% of the global workforce. In addition, it’s one of the most antiquated industries in the world. This summer we spent a ton of time digging into the space and have now made a handful of investments. We’re big believers of founder-market-fit, and this category in particular requires category expertise to navigate a very old-school industry.

Another area we’re spending time in is broker-tech. We’ve seen the “tech-enabled brokerage” model be effective in a ton of different industries including PropTech. A lot of investors believe this space is “crowded” – which is true in some sub-sectors (i.e. residential) – but when you look closely within the commercial real estate industry, we believe there is a massive opportunity to disrupt traditional real estate capital markets firms.

The customer data platform (CDP) is the newest tool in the customer experience arsenal as big companies try to help customers deal with data coming from multiple channels. Today, Adobe announced the general availability of its CDP.

The CDP is a like a central data warehouse for all the information you have on a single customer. This crosses channels like web, email, text, chat and brick and mortar in-person visits, as well as systems like CRM, e-commerce and point of sale. The idea is to pull all of this data together into a single record to help companies have a deep understanding of the customer at an extremely detailed level. They then hope to leverage that information to deliver highly customized cross-channel experiences.

The idea is to take all of this information and give marketers the tools they need to take advantage of it. “We want to make sure we create an offering that marketers can leverage and makes use of all of that goodness that’s living within Adobe Experience platform,” Nina Caruso product marketing manager for Adobe Audience Manager explained.

She said that would involve packaging and presenting the data in such a way to make it easier for marketers to consume such as dashboards to deliver the data they want to see, while taking advantage of artificial intelligence and machine learning under the hood to help them find the data to populate the dashboards without having to do the heavy lifting.

Beyond that, having access to real-time streaming data in one place under the umbrella of the Adobe Experience Platform should enable marketers to create much more precise market segments. “Part of real-time CDP will be building productized primo maintained integrations for marketers to be able to leverage, so that they can take segmentations and audiences that they’ve built into campaigns and use those across different channels to provide a consistent customer experience across that journey lifecycle,” Caruso said.

As you can imagine, bringing all of this information together, while providing a platform for customization for the customer, raises all kinds of security and privacy red flags at the same time. This is especially true in light of GDPR and the upcoming California privacy law. Companies need to be able to enforce data usage rules across the platform.

To that end, the company also announced the availability of Adobe Experience Platform Data Governance, which helps companies define a set of rules around the data usage. This involves “frameworks that help [customers] enforce data usage policies and facilitate the proper use of their data to comply with regulations, obligations and restrictions associated with various data sets,” according to the company.

“We want to make sure that we offer our customers the controls in place to make sure that they have the ability to appropriately govern their data, especially within the evolving landscape that we’re all living in when it comes to privacy and different policies,” Caruso said.

These tools are all available starting today to Adobe customers.

It’s not a good day for two of the top three telecom operators in India. Vodafone Idea, India’s second largest telecom operator by subscriber count, said its consolidated loss had widened to $7.14 billion in the quarter that ended in September in what is the largest-ever quarterly loss witnessed in the nation on Thursday.

The announcement followed a similar outcry from India’s third-largest telecom operator. Bharti Airtel posted a consolidated net loss of 230.4 billion Indian rupees ($3.23) billion after the telco took charge of a one-time $4.3 billion potential outstanding payments to the government related to a court dispute surrounding 14-year-old adjusted gross revenue.

Vodafone India said its $7.14 billion loss also provides for 256.8 billion Indian rupees ($3.6 billion) in outstanding payments surrounding the aforementioned court case.

In the filing, the Indian unit of British giant Vodafone Group and billionaire Kumar Mangalam’s Idea Cellular said it will file a review petition to India’s apex court to challenge the federal government’s decision.

In recent weeks, executives of UK-headquartered Vodafone, which owns 45% of Vodafone Idea, have said that the group’s telecom business in India could collapse if the government does not offer it any relief. The network’s India unit is already saddled with $14 billion in debt.

Vodafone Idea posted a revenue of Rs 108,440 million Indian rupees ($1.5 billion), down 3.8% since last year. The company’s net loss during the same period last year stood at $687 million. Bharti Airtel’s revenue in the quarter stood at $2.93 billion.

Last month, the Indian Supreme Court ruled that Vodafone Idea and Bharti Airtel and several other operators including some that are no longer operational will have to pay a combined $13 billion in adjusted gross revenue as spectrum usage charges and license fees to the government within 90 days.

The Indian government and telecom operators are disputing over how gross revenue should be calculated. The government has mandated that license and spectrum fee to be paid by operators as a share of their revenue. Telcos have argued that only core income accrued from use of spectrum should be considered for calculation of adjusted gross revenue.

Bharti Airtel has also requested the government for waiver. Through a spokesperson, Gopal Vittal, MD and CEO of Bharti Airtel’s India and South Asia business, said, “We continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry.”

Mukesh Ambani, Asia’s richest man who runs telecom network Reliance Jio — which has become the largest operator by subscriber count by starting a price war in the country three and a half years ago — has said that he does not share the view of his rival networks. His telecom network owes the least to the government — $1.8 million.

Carriers Reliance Communications, run by Mukesh’s brother Anil Ambani, and Aircel, run by tycoon T. Ananda Krishnan, also owe the government money. They have been bankrupt for years.

Back in September, endurance events marketplace Let’s Do This (a YC alumni) raised a $5m seed round from a number of US investors, including Olypmic star Usain Bolt and tennis star Serena Williams. As much as I’d like to get excited, this is slightly par for the course for a lot of sports-oriented startups which catch the eye of a celebrity. Not that they are without merit, of course.

Suffice it to say, their sports stars, plus a strong push to get funding from Silicon Valley has landed the startup with a $15m Series A round led by European/US VC EQT, with participation of the previous investors including Trulia founder Pete Flint, YCombinator, alongside, yes, you guessed it, Usain Bolt and Serena Williams .

The platform lists 30,000 races of all distances and disciplines and claims to be the largest marketplace for endurance events in the world, offering key information about the races and exclusive booking perks for members such as free cancellation protection. It recently agreed a partnership with Hearst to power all race listings across Runner’s World, Men’s Health and Women’s Health in the US and the UK.

The startup is set to expand its team of sport enthusiasts across its San Francisco and London offices. The company was founded by University of Cambridge graduates Alex Rose and Sam Browne – both passionate runners and cyclists who had experienced the arduous process of discovering and entering events firsthand.

The Let’s Do This algorithm uses data points from fitness tracking, race history, social connections and more, to personalize race recommendations. Part of the marketing story is that people are 12.5 times more likely to develop a fitness habit after 12 months from signing up to a race than from joining a gym.

Serena Williams, the 22 time Grand Slam Champion, commented: “I’ve seen first-hand the incredible impact these events can have on making people fitter, healthier and happier. I love that Let’s Do This is not only making events like these more accessible but also helping to support athletes of all different fitness levels. Women are especially less likely to participate in marathons and obstacle races, so it’s really important there’s a platform encouraging people to step out of their comfort zones and make a positive difference in their lives.”

Usain Bolt said in a statement: “Throughout my career I’ve been lucky enough to inspire people to follow their dreams, get off the couch and get exercising… It’s a really natural fit with what I care about and what I believe in, so I am very happy to be supporting their mission to inspire more people to have epic experiences.”

Founder Sam Browne says the quick fundraising has come about in part because “The market’s big, affluent and we’re already the dominant marketplace in it.”

Google is adding a nifty new feature to its search results when you look for the pronunciation of words. You’ll now be able to not just hear the correct pronunciation, but you can also now practice the right way of saying ‘quokka’ and get immediate feedback on the page. While you may not think you need a tool like this, it’s surely a great tool for language learners.

All of this, of course, is powered by machine learning. Google’s speech recognition tools process the recording, separates it into individual sounds, and then compares it to how experts pronounce it.

In addition to this new pronunciation feature, Google is also adding more images to its dictionary and translate features. For now, this is only available in English and only works for nouns. It’s quite a bit harder to find the right image (or GIF) to illustrate verbs, after all, let alone adverbs.

“Advances in speech recognition and machine learning can improve the way we learn about languages,” Google says in today’s announcement. “We hope these new features give you a creative, more effective way to practice, visualize and remember new words. We plan to expand these features to more languages, accents and regions in the future.”

Bonus: here is a video with lots of quokkas.

 

 

 

Google today announced that it is now rolling out support for Rich Communication Services messages (you can think of it as the next generation of SMS) in the Android Messages app to all of its users in the U.S., after already testing it with a small set of users in recent months. For Google, this push for RCS is also a way for the company to more effectively compete with Apple’s iMessages (though it doesn’t feature end-to-end encryption) and since Google has mostly taken control of this rollout away from carriers, it gets to call the shots on when users get access to this, not the telcos. It already did this in the UK and France earlier this year, so the company already has some experience in managing this service.

It’s also no secret that Google’s messaging strategy, at least for consumers, remains messy, with Hangouts still being a widely used tool. At least on mobile, Google hopes that Messages, which until now was essentially the company’s SMS client, can take over that role. Like other messaging services, RCS support in Messages will allow you to talk to your friends over WiFi or mobile data and send photos and videos. You will also get read receipts, typing notifications and all the usual messaging features you’d expect.

With Google taking control of the rollout, it’s also now responsible for keeping this network running and there are some legitimate concerns about the company owning this over the carriers. On the other hand, though, the carriers didn’t do them any favors by making their own RCS rollouts as messy as possible, up to the point where Google really didn’t have an option but to do this itself. For Android users, though, this is good news, even though they will still show up with a green bubble on iPhones — and will hence be judged by their iPhone-using friends.