Anthill Ventures, along with Gruhas Proptech and DLF Family Office, is aiming to boost the prop-tech sector -- with a focus on technology and sustainability. The Proptech startups have an opportunity to raise funds and receive mentorship for scaling up through their new program Gruhas Aspire.
Here, Sailesh Sigatapu, Partner at Anthill Ventures, tells us more. Excerpts from an interview:
DQ: How will the proptech sector continue to evolve in India in the next 5-10 years?
Sailesh Sigatapu: PropTech as a sector has evolved considerably in the past decade or so from PropTech 1.0 to PropTech 2.0. PropTech 1.0 focused almost entirely on digitizing the real estate buying, selling, and renting market via listing platforms.
PropTech 2.0 saw the integration of the shared economy via vacation home rentals and co-working spaces. We are now at the cusp of PropTech 3.0, which is characterized by adoption of technologies like Internet of Things (IoT), which enables energy efficiency; blockchain, which empowers property rights and data accuracy; and robotics, which brings efficiency in construction. The PropTech market in India is set to touch USD 1 trillion by 2030, up from USD 120 billion in 2017.
DQ: Which real estate technology segment seems attractive for investment opportunities?
Sailesh Sigatapu: Several cutting-edge technologies are being applied to real estate in India, which offer attractive investment opportunities. Take, for example, IoT, which enables occupiers to monitor energy and water consumption, and leads to sustainability and cost savings.
The market is large, with estimates suggesting that the number of IoT-connected devices across the world will triple from 8.7 billion in 2020 to 25.4 billion by 2030. Robotics empowers developers on construction sites to reduce wastage, increase productivity and enhance consistency in quality. The robotics process automation market was worth nearly USD 2 billion in 2021. It is forecast to grow at double-digit rates until 2025.
Blockchain, which allows investors to verify property information, reduce time lags in closing deals and store information in a safe manner, is expected to boost global GDP by USD 1.76 trillion by 2030.
DQ: How can India accelerate as a leading real estate technology hub, and what are the main challenges against this?
Sailesh Sigatapu: India has all the elements of becoming a global PropTech hub, including talented people working on interesting ideas. Historically, one challenge has been the market acceptance for technology-led solutions in real estate and construction, as the sector continues to be led by legacy businesses that were set in their ways and individuals who trusted a touch-and-feel experience. The pandemic and its impetus to digitization has changed this to a large extent.
However, a second, larger challenge is that of ensuring environmental sustainability. With 40 % of all global greenhouse gas emissions emanating from construction and real estate, the future of the industry lies in embracing climate-friendly products and services. They not only reduce the carbon footprint of a building, but also ensure a better quality of life and work for the occupants, making it a better long-term investment.
This is why Anthill has joined hands with Gruhas Proptech and the DLF Family Office to launch the Gruhas ASPIRE (Accelerating Sustainable Proptech in Real Estate) Program. Through this program, we will scale early stage proptech companies, especially those with a focus on sustainability, and ensure that their products and services bring positive climate action into the construction and real estate industry.
DQ: Contractors and property developers have traditionally been slow to embrace software solutions. How will the start-ups work to solve this challenge?
Sailesh Sigatapu: The construction and real estate sector in India is fragmented with a large number of players working through informal relationships. Start-ups have the opportunity to digitize this space. The slow uptake of digitization can be overcome through a number of ways. These include offering trials and pilots to show how a product or service works and offering short-term subscriptions to start with rather than an outright purchase.
A hardware product must be plug-and-play, or it can be installed remotely with little to no client training. User experience of a platform must be predictive and comprehensive. Transparency in pricing and payments and creating products or services that have more than one use case can also help.
DQ: How can data-driven decision making in real estate in the future, with the increasing value of data-driven insights?
Sailesh Sigatapu: Advancements in IoT and its use cases in data collection and analyses have provided a strong impetus to data-driven decision making. Today, every single industrial, commercial and residential space can be automated to collect and analyze data on energy and water consumption or movement and occupancy or machine health and productivity. This data can provide valuable information to decision-makers who are interested in improving efficiency, ensuring health and wellbeing, and having a positive impact on the environment.
India’s top developers and occupiers already use these technologies, and now we are seeing a rapid expansion to smaller players as well, as benefits become apparent. As this technology scales, however, it is important to ensure the privacy and security of data.
DQ: How does the VC investment community view the emergence and growth of PropTech in India?
Sailesh Sigatapu: VCs have been closely tracking proptech’s evolution in India and are excited for this next phase, where the integration of deep tech and sustainability will transform the way properties are built, leased/ sold, and used. According to reports, investments in Proptech touched $9.5 billion last year.
In particular, the pandemic has accelerated digitization, put a spotlight on people’s quality of life at home and work, and underlined the importance of positive climate action. Developers, property managers, brokers, and buyers/ tenants have higher expectations of quality, safety, and sustainability, which bodes well for the young, ambitious startups in this space, whether they create alternative building materials or democratize access to real estate investments.