The property market worldwide has experienced a wave of disruption both due to the digital revolution and the change in the way people work. The rise of proptech – or real estate technology – is changing the way the business of property is done and proptech start-ups are capitalising on opportunities in markets across the globe. With general private equity investment in South Africa doubling to R31.3bn in 2017, the opportunities for proptech to access funding and create growth are real.
Within the South African proptech ecosystem, numbers and market shares are generally smaller than its global partners. However, SA proptech’s have the same unique opportunities of scale due to its sheer population size, and the opportunity to solve complex socio-economic challenges, while achieving commercial success – doing good by doing good.
Interest in the overall startup/tech scene in SA is growing. Naspers also earmarked R1.4 billion in 2018 to support South African start-ups and drive local innovation according to SA Proptech
Flexible workspace giant, IWG plc, recently relaunched its Regus App in South Africa helping brokers, entrepreneurs and small to giant corporates find coworking spaces, office space and meeting rooms on-the-go to keep up with the demand for flexible workspace.
Sean Godoy is a Director of Divercity Property Solutions and founding member of the SA Proptech Association, the Cape Town chapter of which was launched at Spaces (a IWG plc brand) this month. IWG spoke to him about the power of proptech to create and explore business opportunities and solve complex problems in South Africa. 1. You are an Africa optimist and you'll be representing Proptech South Africa at MIPIM. In your opinion, what is unique about what South Africa brings to the proptech table?
“The South African proptech ecosystem is exciting because it harnesses global tech trends such as big data and AI, while at the same time solving local problems in an effective and meaningful way. At the end of the day, copying and pasting any solution from another region may not necessarily be effective. Instead, it all starts with problems or limitations with the current way things are being done within a specific market.
An example is online or digital estate agents which are prevalent in SA, such as Property Fox, Leadhome and Eazi.com. These platforms offer varying degrees of digitisation of the home buying and selling process, but also plug into the physical aspect of property which will always be relevant.
Viewings, inspections and other physical visits will always be part of the process. What these companies have done is streamlined a sometimes slow and tedious process, and made it more efficient and, in some instances, safer. This is a global problem or challenge with estate agencies, and these companies are solving it within a local context.
Our context is one of contrasts. On one hand, we have a world class financial industry and stock exchange, an innovative revenue service and a thriving entrepreneurial ecosystem. On the other, we struggle with high levels of poverty and inequality, and face significant challenges regarding basic education.
However, many capable individuals and organisations from both public and private sector are tackling these problems, and at the same time they present opportunity for entrepreneurs and tech start-ups to provide meaningful and impactful solutions. This is the reason I love South Africa and the continent as a whole. Our diversity and challenges breed innovation and creativity.2. Are there any property sectors which have been overlooked or where there is still opportunity for innovation through technology?
The proptech sector within SA is still at in its early stages of development, although this is changing quickly. We have some very competent proptech companies that have been around for a number of years.
Affordable housing holds massive potential in my opinion, for both the traditional property industry and for the proptech sector to provide new approaches and products. This can come in many forms, from access to finance, innovative rental management platforms and new platforms to empower communities and local stakeholders within the development process.
There is some exciting work taking place in the sector that uses tech-enabled interventions in SA and other African countries, although I believe significant opportunities are yet to be tapped.3. Entities like the Enterprise Development Property Fund are doing work in transformation of the property industry and helping new startups through mentoring. Is this something you would say we are doing particularly well in SA?
Entrepreneurship is key to growing any economy, especially within an emerging market context. In SA, we have the added need to address transformation in the greater economy, and in the property industry.
The Enterprise Development Property Fund (EDPF) is doing some fantastic work to this end by mentoring and training property entrepreneurs, while South African Institute of Black Property Practitioners (SAIBPP) offers a one-week Property Entrepreneurship Programme which introduces and equips first-time property investors or developers with the knowledge and tools to begin their property journey.
These are encouraging examples, but I believe the public and private sectors can do much more to support and encourage entrepreneurs within our dynamic and diverse property industry. It is an industry which has been historically difficult to access for many South Africans for a variety of reasons, and we need to promote and nurture entrepreneurial talent and opportunities to ensure a prosperous and equitable future.”