Insights From a PropTech Hackathon
Competitors proposed solutions to tackle Hong Kong’s land and housing shortage, retail mall operations and China’s multi-family housing.
By Paul Chen, Head of Asia for RealFoundations
In August, I helped run “Asia PropTech Innovathon (www.innovathon-asiaprop.tech),” a hackathon held in Hong Kong. Participants were expected to create technology-based solutions for a given problem within 24 hours. Teams were vying for cash prizes of HK$20,000 (US$2,500), HK$15,000, and HK$5,000, along with a multitude of mentorship opportunities.
Doors opened on Friday (August 17) at 6pm. We had well over 100 participants ranging from university students to professionals from the real estate and technology industries. Some came as pre-formed teams, and others were looking to join a team. By 8 pm, participants were grouped into 15 teams, and they were asked to tackle three challenges:
- Address the land and housing supply shortage in Hong Kong
- Optimise retail operations to enhance convenience and accessibility
- Improve residential operations to enhance the end-to-end customer experience
Pitching began at 4pm on Saturday. Teams had roughly 20 hours to formulate their solutions. Each team had 5 minutes to pitch, followed by a 4-minute Q&A. We had about 10 mentors at the event to help the teams on the problem statement, advise on market realities and formulate the storyboard for their pitch.
Most participants chose to tackle the land and housing supply shortage in Hong Kong. Among the “hot” technologies that were included in the proposed solutions were the Internet of Things (IoT), Blockchain and Artificial Intelligence (AI). Most solutions involved combining a mobile-based front-end solution with a business model. There were also teams that combined the different “hot” technologies to arrive at a solution.Third-placed team ReVita proposed to solve the housing shortage problem by streamlining the development permitting process. Through a combination of data aggregation, AI and workflows, ReVita aimed to bring together various stakeholders in the development permit process including government agencies, owners, brokers, developers and contractors so that they could collaborate on a common platform to help simplify the development approval processes.
Cash Flow Visibility
Second-placed team Mr. Ja addressed the retail challenge with a solution called AirCNC. They marketed themselves as the “AirBnB for retail” by providing under-utilised retail space for “pop-up” retail. The team already has a platform in place for offices and believes the addition of big data and algorithms can provide a more effective solution to match pop-up retail with the available space.
The winning team was Farmacy HK, whose motto is “make farming possible in the heart of our city.” The company, which has been in business for a few months, grows agricultural products such as flowers, herbs and fruits in urban areas. Their solution enables the decentralisation of farming operations through IoT, monitoring systems, smart farming modules and agricultural sciences. Farmacy claimed that with their technology and know-how, they can deliver higher yields per square foot even in urban areas. Their current revenue streams come from both agriculture sales and modular system sales. They already have local restaurants as customers with an additional 10 restaurants in the pipeline.
Honourable mention goes to AG Ventures, which addressed the residential challenge, targeted explicitly at opportunities in the multi-family sector in China. AG Ventures provided a platform to manage customer demand, renovations, capital expenditures, move-ins/move-outs, rents and others. The platform enabled investors to understand the drivers that impact cash flows in their multi-family portfolio. It had been in development for some time and was being used in North America and Japan. AG Ventures hopes to localise the product for China.
Among the participants, over 75% had a tech background, and almost everyone had a real estate interest. Most of the teams already had a technical tool in mind. They needed to see how they could apply their solutions to address the relevant problems to create value.
While the growth of the PropTech industry as a whole is in its early stages, Asia has had some high-profile funding in the past few years. Globally, the real estate industry has been slow to adopt innovative solutions, but this is even more so in Asia compared to North America and Europe.
An important condition for the PropTech industry to succeed is market size. North America and the UK have huge domestic markets and they share a common language. Startups in these regions have larger markets with which to experiment their products or pivot their solution to address a related sector.
China’s Multi-Family Proptech Ventures
The untold story in recent years has been China’s PropTech market. A growing number of tech and real estate start-ups have been focusing on the rental market for multi-family housing in China. The western media often do not pick up on these ventures because they are not well known outside of China, and they don’t need to be because their domestic market is massive.
Start-ups in Asia haven’t been able to build scale to disrupt the incumbents due to a lack of financial and political capital, and hence traditional real estate players in Asia are unlikely to become obsolete soon. However, to stay competitive and retain their significant market share, these incumbent players must learn to engage in strategic partnerships with large tech giants as well as startups.
Asia PropTech aims to help PropTech startups in the region by building an eco-system consisting of Asian real estate veterans to inject know-how, a “PropTech lab” to accelerate proof-of-concepts with real-life use cases, and funding to scale start-ups. The PropTech innovathon was a catalyst to connect real estate companies with future stars in PropTech. Key sponsors Great Eagle and RealFoundations have already begun their mentorship program for the outstanding university student teams from the event. Active collaboration between tech entrepreneurs and real estate incumbents will lead to innovations for the real estate industry in Asia.
About the author: Paul Chen is Head of Asia for RealFoundations, a global services company focused on helping real estate companies improve their operating platforms. Paul is also the designated guru of Asia PropTech. Paul has worked at the intersection of real estate and technology for 25 years.