© Provided by Business Insider The Insider reporter Alex Nicoll at the Blueprint 2021 real-estate tech conference at the Mandalay Bay hotel. Alex Nicoll/Insider
The synthesized horns of Usher’s dance hit “Yeah” blared out over an artificial beach at the Mandalay Bay hotel and casino on the Las Vegas Strip. Live onstage, bathed in purple and blue lights, Ludacris rapped his verse of the iconic 2004 single to hundreds of people – many of whom were real-estate tech founders and investors attending the inaugural Blueprint conference.
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“Thank you to Blueprint and ITC!” Luda crowed. The hip-hop star was performing at the after-party for twin conferences: Blueprint, a new real-estate tech conference, and InsureTech Connect, a thousands-strong conference that’s the largest in the insurance-tech industry.
Dozens of people took out their phones to record the moment, as hundreds of their colleagues and competitors danced. Some of them were still wearing their identification badges on lanyards; others waded in the swimming pool that separated the crowd from Ludacris.
I swayed alongside the founders, venture capitalists, and executives after countless hours of meetings at ballroom tables over the previous three days. Ludacris’ performance was far from the only source of euphoria at the conference.
Almost everyone I spoke with said Blueprint was their first in-person conference since the coronavirus pandemic hit. A once tedious ordeal, like six back-to-back coffee meetings, is now a novel delight. Startup founders looking for funding, VCs looking for their next investments, and the innovation arms of major landlords and asset managers looking for the next products for their massive portfolios all mingled.
And now they were together, not on screens in boxes, but in Las Vegas, in a convention center nestled past hundreds of slot machines. Fun!
But it wasn’t just that.
You could practically feel the money pulsing through Blueprint 2021. The whole conference center – with a modest 700 or so attendees compared with thousands downstairs at InsureTech – was buzzing with deals being negotiated and connections being made.
It was real-life evidence of a trend I’d previously just reported on from afar. Property technology, or proptech, funding is, yet again, stacking up at a record pace, with $9.7 billion in the first half of 2021, according to JLL.
At Blueprint, I overheard people talking about closing in on a $5 million to $7 million round during the conference itself and describing meeting with seven venture-capital firms in one day. I spoke with founders who launched proptech companies during the pandemic, like one who is creating a marketplace for purchasing shares of individual homes. I chatted with 10-year veterans of the industry. And they all said largely the same thing.
“The pandemic has been terrible for a myriad of reasons, but it has also brought in a golden age of proptech,” declared Nick Romito, the CEO and cofounder of one of proptech’s earliest unicorns, VTS, in one of the main stage sessions at the conference. VTS started off as a leasing-management tool when it was founded in 2012. It has more recently built up a leasing marketplace and acquired Rise, a tenant-engagement app for offices.
Earlier this year, I rang up VCs, like the MetaProp cofounder and Bain Capital Ventures investor Clelia Warburg Peters, who told me it had become clear the pandemic was the moment when proptech had arrived.
Real estate is a slow-moving beast, but in the scary days of March and April 2020, even the slowest-moving realized that tech had to enter the space. It was necessary to facilitate remote tours of houses and apartments, to allow banks to monitor the construction sites their loans were backing but couldn’t visit, and to move company data from an office server to the cloud.
As the pandemic wore on, real-estate tech firms continued to fill needs that were exposed by COVID-19. While flexible-office startups had a rough early run, their on-demand and short-term office leases are more attractive now as the future of the five-days-a-week office is uncertain. Other startups found ways to fill up vacant retail and office space that’s otherwise beginning to look unleasable.
At Blueprint, I heard so many drastic examples of post-COVID-19 gains. Jamie Hodari, the CEO of the CBRE-backed flex-office company Industrious, said the company would most likely create three times as much revenue this month as it did in any pre-COVID-19 month. Separately, Joseph Woodbury, the CEO of the storage-space marketplace Neighbor, told me his company had 25 times as much commercial space on its platform as it did a year ago. It gives real-estate investment trusts and large landlords another way to make money on vacant space.
And big money is watching, too. Proptech’s biggest venture funds are amassing more capital than ever, with MetaProp’s new fund, Fifth Wall’s Climate Fund, and assorted special-purpose acquisition companies. New entrants like Tiger Global have written massive checks to over a dozen of the big names in the business. After a short break from proptech investing after WeWork’s attempted 2019 initial public offering, even SoftBank is getting back into the game.
The enthusiasm has led to faster deal times, bigger checks, and more money for founders at an early stage, most notably the second-home-sharing startup Pacaso, which became the fastest-ever unicorn earlier this year after just five months of operation. With so much money floating around, founders’ concern after WeWork’s 2019 fiasco that proptech funding could dry up seems quaint, especially with WeWork set to go public by SPAC later this month.
“It’s a founder’s market right now,” Marcela Sapone, the CEO and cofounder of the multifamily concierge and building-management company Hello Alfred, told Insider. Hello Alfred was founded in 2015. It now provides app-based personal-assistant services to renters across more than 130,000 units, Sapone said, but it took a while to catch on.
“Our first launch was probably too early,” Sapone said. But now, the company, and the industry, are buoyed by pervasive enthusiasm.
Romito of VTS told the conference how, after pitching his company to a VC for the first time, they told him they “wouldn’t touch that with a 10-foot pole.” Not anymore. As Romito said, “The market is moving at a pace that I don’t think anyone in this room could have imagined.”