Posts in category: News

ARE YOU AN AFRICAN PROPTECH START-UP? 

Africa Proptech Forum 2023 Start-Up Competition, powered by REdimension Capital and Investec Property Fund, is seeking to attract, showcase and reward the most innovative, early-stage African companies, addressing the technological and sustainability needs of the continent’s property market. 

The competition is open to start-ups from across Africa, and provides a platform to pitch your business to industry leaders, VCs, accelerators and potential new customers.  

ENTER NOW

COMPETITION TIMELINE 

Submission deadline (extended) – 18 August 2023 

Virtual Pitch Day – August/September 2023 

Grand Finale & Award Ceremony – 11 October 2023 

 JUDGING PANEL  

Nivesh Pather – Investment Manager, Norrsken 22 

Peter Clark – Founder & Managing Partner, REdimension Capital 

Ibrahim Sanga – Executive Chairman, Sliverback Holdings 

Zach George – Managing Partner, Launch Africa Ventures 

Andre Bothma – Growth Principal, EMA, JLL Spark 

Vyshakh Kodoth – Investor, Metaprop  

PRIZES 

The winner of the Africa Proptech Start-up Competition stands a chance to win prizes worth a total of USD 10,000+ inclusive of: 

🚀 Cash prize of USD 2,500 

🚀 Exposure to industry leaders, VC’s, investors, and potential new customers 

🚀 Dedicated mentorship from leading venture capital and real estate figures 

🚀 Company email campaign to API database of over 26,000 subscribers 

🚀 Feature and mention in a dedicated global press release and social media posts 

Last year’s winner received investment from one of the companies represented on the judging panel 

For more information and to enter go to:

www.africaproptechforum.com 

We are delighted to share with you our first newsletter of 2023. 

As a business focused on innovative technology to address productivity, efficiency and sustainability within the built environment, our newsletter aims to provide insights into key sector trends, new innovations and transactional activity in the South African and global markets. 

Should you have any comments or feedback on any of the content of this newsletter or otherwise, please don’t hesitate to contact the REdimension team on info@REdimensionCapital.com.       

Sincerely, 

The REdimension Capital Partners 

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Looking back to move forward 

Africa on its own pathway 

The era of abundance in global funding for both direct real estate and real estate technology appears to be over. Preliminary data points to a significant drop in capital allocated to both physical property and property technology in 2022 vis-a-vis 2021. A combination of multi-decade highs in global inflation, resultant monetary policy changes and recessionary fears, has left developed markets in a period of significant uncertainty, both in the investment and occupier markets. 

The story was different in Africa in 2022. Investment into African start-ups grew by 35% year-on-year (the only continent to recognise start-up funding growth). While the primary beneficiaries of this capital continue to be fintech and pharma focused entities, there is broad recognition of the growth opportunities across early-stage businesses. 

Proptech’s accelerated growth journey 

Over the last decade, proptech funding in developed markets has seen exponential growth as the use cases have been proven to the end-users. In 2012, global proptech investment was less than $1bn but scaled significantly to a high of $32bn by 2021, growing by a compounded rate of 47% per year. According to the Center for Real Estate Technology and Innovation, $19.8bn of funding was raised globally for proptech funds in 2022, representing 4.4% of total venture capital fundraising, (still a relatively low figure considering real estate is the single largest global asset class). The African proptech opportunity, whilst nuanced by the unique underlying property market dynamics, is showing signs of significant growth ahead, and is set to follow the same trends which have been witnessed in the developed markets over the last decade. 

As the only dedicated proptech investment platform in Africa, REdimension Capital has engaged extensively with property owners, managers and proptech innovators from across the continent – actively understanding and connecting problems with solutions. We are continually encouraged by the ever-growing groundswell of interest in product development, adoption, and investment. We maintain our strong conviction that the accelerated growth of this burgeoning sector is fast approaching. 

Outlook for 2023 | Power production and energy efficiency 

Picking up from where we left off in 2022, small scale renewable energy solutions will continue to be a major theme of investment for South Africans across sectors, as will optimising energy efficiencies, particularly in energy intense sectors such as real estate. As the scale of the energy deficiency is becoming increasingly evident, it is clear that any business operation will need to take ownership of the problem, through investment, to remain sustainable. While diesel powered generators have been the predominant solution to keep the lights on, these solutions were never expected to carry such a heavy load, and have become increasingly expensive to operate. Hand-in-hand with renewable solutions, are the technology-based tools buildings can increasingly adopt to monitor and optimise production and consumption. We anticipate these will be increasingly attractive products for numerous categories of energy consumers. Solutions range from software to support real-time load management, issue detection and preventative maintenance scheduling to AI-enabled facility automation and optimisation. 

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Landmark transactional activity locally and abroad 

• Flow – the South African property marketing platform raised a $4.5 million pre-Series A funding round led by Futuregrowth Asset Management 
• Spleet – the Nigerian residential-focused proptech raised $2.6 million of seed capital led by MaC Venture Capital to scale its product offering 
• Fifth Wall – the global proptech investor closed its maiden Climate Fund with $500 million of commitments, making it the largest investment vehicle aimed exclusively at decarbonising global real estate 
• PropTech1 Ventures – the Berlin-based proptech investor has completed the first closing of its second fund with €44 million of commitments. Real estate owner-investors included amongst others, Commerz Real and Supernova Group 
• Goodlord – the UK-based proptech acquired Halo, a tenant engagement and management platform. The acquisition follows previous consolidation by the company, having recently acquired referencing software vendor Vouch and bill-splitting app Acadia 
• Skillit – a US-based recruitment platform for full-time construction labour raised $5.1 million of seed funding 
• Landeed – raised $8.3 million to continue developing the most comprehensive property title search engine in India and simplify the process of property due diligence 

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What we are reading 

• Five leading trends in the proptech industry for 2023 
• Net Zero, Focus on Niche Specific Sectors and Technology Innovation are the key trends affecting African Real Estate 
• State of Venture 2022 – Report 
• Sustainability in proptech: Building for the future 

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About 

Founded in 2021, REdimension Capital was established to focus on property technology and sustainability investments in South Africa and globally. Its founding       partners boast a diverse but property-centric blend of skills and experience as well as deep and extensive networks within the property and technology sectors. 

Since its establishment, REdimension Capital has developed the most extensive property technology and sustainability company database in South Africa. Through market research and ongoing industry screening process, REdimension Capital continues to be a leader in understanding the attractive landscape of       investment opportunities in new innovations and technology relating to the built environment. 

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Disclaimer 

This disclaimer governs the use of this newsletter. By using this newsletter, you accept this disclaimer in full. 

We are delighted to share the third REdimension Capital newsletter with you.

As a business focused on innovative technology to address productivity, efficiency and sustainability within the built environment, our newsletter aims to provide insights into key sector trends, new innovations and transactional activity in the South African and global markets.

Should you have any comments or feedback on any of the content of this newsletter or otherwise, please don’t hesitate to contact the REdimension team on info@REdimensionCapital.com.

Sincerely,

The REdimension Capital Partners

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Sustainability in our built world

Real estate contributes 39% to global greenhouse gas emissions, making it the single largest emitter of any industry. This untenable status has meant that climate action is increasingly a priority for the sector, with interested stakeholders including tenants, investors, debt funders and regulators alike. An unprecedented response is required to match the scale of the crisis if the sector is to achieve the goal of a sustainable built environment. Indeed, this needs to be a transformational decade in the shift towards net zero buildings.

Global metropolitans are at the forefront of addressing this challenge through the enactment of new regulations. In South Africa, the four largest municipalities (Johannesburg, Tshwane, eThekwini and Cape Town) have signed up to the global C40 Initiative – a network of 100+ world leading cities collaborating to deliver the urgent action needed to confront the climate crisis.

C40’s mission is to halve the emissions of its member cities within a decade. The four South African cities have all pledged to enact regulations and/or planning policy to ensure new buildings operate at net zero carbon by 2030, and all buildings by 2050.

Existing technologies, including the sourcing of energy from green providers, can only reduce current real estate sector CO2 emissions by 46%, according to research led by the World Green Building Council. Clearly, significant further innovation and investment is needed to deliver on global net zero targets.

Based on the most recent public company reporting, renewable energy is the key environmental focus of the South African market, given the more demonstrable return profile and additional benefits of energy supply certainty. We see this trend continuing whilst renewable energy remains a relatively small (<10%) component of most portfolio energy consumption.

In this regard, it was interesting to see Attacq announce a Power Purchasing Agreement (PPA) for the direct acquisition of renewable power to supplement their embedded generation (effectively tripling their renewable energy capacity) as well as Fortress REIT announcing the trialling of a battery installation at Bloemfontein Value Mart. Perhaps in the future, South Africa may welcome more sustainable options for power storage such as gravity energy storage solutions like Energy Vault.

As a result of the ongoing instability of power supply, it is no surprise to see exciting new solar rental and rent-to-own businesses emerging, including GoSolr and Versofy, targeting the residential homeowner.

There are also interesting developments in sustainable technologies within the building material and construction processes, with some early-stage technology breakthroughs including:

• Neustark – a Swiss based company using recycled concrete as a carbon dioxide reservoir permanently storing the same amount of CO₂ that is generated during its production; and
• Icon – an US company specialising in 3D printing robotics, software, and advanced materials for the construction of  3D printed buildings. The company has constructed and sold the world’s first 3D printed home and is in discussions with the South African Department of Science and Innovation, in partnership with the KwaZulu-Natal Department of Human Settlements, for the piloting of 25 housing units with the aim of establishing sustainable human settlements across the country.

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SAPOA Proptech survey

SAPOA has recently launch a proptech committee with the backing of other industry associations, including SA REIT Association and Green Building Council South Africa (GBCSA). The objective of this industry leading committee is to drive a collaborative sector approach to technology and innovation initiatives for the built environment to: 1) increase industry profitability; 2) improve industry customer experiences; and 3) reduce risk.

REdimension Capital is proud to be represented on this committee which will educate, inform and support the sector as the pace of digital transformation and technological innovation accelerates.

The committee has issued a short survey – available here – and would welcome your feedback and insights. The responses will help inform a tailored approach for the committee allowing it to optimally service the industry’s needs.

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Africa Proptech Forum Start-up Competition 

We are pleased to have partnered with the Africa Proptech Forum in support of their start-up competition. If you are an early-stage proptech operating in Africa, visit www.africaprotechforum.com to get more information on this exciting opportunity. In addition to the monetary awards, the competition affords a great opportunity to showcase your business to industry leaders, VCs and potential new clients. 

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Landmark transactional activity locally and abroad

• DigsConnect has raised money from the Delta – Africa’s largest venture builder. DigsConnect is the largest student accommodation housing platform in Africa.
• Gmaven is looking to raise $500k to continue to build out its commercial real estate software and data services.
• Pupil has raised $45m and recently signed a strategic agreement with Cushman and Wakefield. Pupil is a spatial data company that has created an ecosystem to digitally map the built world.
• Parcl raised $4.1m to digitise real estate investments, by creating a way for everyone to invest in real estate via a digital square foot of real-live property through its price index.
• Flow carbon raised $70m to further build out its carbon credit trading platform enabled by blockchain. The platform issues tokens which are linked to offsets to help create an easier and verified process for companies to offset.

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What we are reading

Real Estate Tokenization Promises to Democratize CRE Investing | GlobeSt

SA’s proptech revolution is about to begin

Partnership: The Critical Ingredient for PropTech Adoption

Using proptech to combat climate change

The Rise of Proptech in Commercial Real Estate

Proptech For Good ebook

Let’s Get Digital: The Big Trends Speeding Real Estate Digitisation

How do FTSE 100 REITs approach tech and sustainability?

Meta predicts the metaverse could add $40 billion to Africa’s economy

We are delighted to share the second REdimension Capital newsletter with you. 

As a business focused on innovative technology to address productivity, efficiency and sustainability within the built environment, our newsletter aims to provide insights into key sector trends, new innovations and transactional activity in the South African and global markets. 

Should you have any comments or feedback on any of the content of this newsletter or otherwise, please don’t hesitate to contact the REdimension team on info@REdimensionCapital.com. 

Sincerely, 

The REdimension Capital Partners 

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Real estate markets increasingly engaging with technology 

Global real estate continues to leave investors questioning whether the current investment landscape, significantly impacted by the pandemic, carries unpriced risk, or represents an attractive investment opportunity off a low base. Elevated geopolitical tensions and the start of higher inflation and a rising rate cycle globally provides further uncertainty to local economies and financial markets. 

A number of South African listed property companies have reported this year, and apart from the ongoing challenging fundamental backdrop, sustainability and technology have become increasingly prominent in reporting, and a topic of conversation between investors and management teams. 

The emphasis on innovation and technology complementing the physical asset proposition has been clear, both as a means of differentiation, and also as a means of driving efficiencies and optimization within portfolios. Concepts such as omnichannel retail and dark stores, hybrid workspaces, user experience and engagement platforms, smart sensors, AI, and even blockchain, the metaverse and non-fungible tokens are becoming increasingly mainstream concepts already evident to a greater or lesser extent in African real estate. While these disruptive technologies may present further uncertainty for the sector, for those that engage actively with them, they present a significant opportunity. Requiring an element of specialist knowledge and focus beyond traditional bricks and mortar, it is no surprise to see the appointment of dedicated technology custodians within property businesses. 

Corporate technology investment 

Consistent with this trend towards technology innovation and adoption, the latest round of integrated reporting shows some notable corporate innovation investments including: 

• Fetch Analytics (Vukile) providing big data location insights around human mobility and footfall within the built environment. 

• Shôping (Attacq) an app specifically designed to transform the visitor experience at the Mall of Africa, allowing an interactive interface to communicate with visitors, provide navigation assistance and facilitate digital gift vouchers and loyalty stamps. The app also has an integrated virtual currency, “ZAKA”, that can be redeemed at participating stores. 

• SOKO digital platform / NIKA voucher system (Hyprop) a flexible digital leasing platform that enables independent brands to connect in a physical space with their customers without the significant financial commitments that are typical of the traditional retail environment. The platform facilitates online leasing, trading, payment settlement and data analysis and is integrated with NIKA, a digital gift card allowing for the purchase, gifting, and redemption of vouchers via an app. 

Liberty Two Degrees has also recently announced a new partnership with MallComm, a digital tenant-engagement platform piloted at Eastgate Shopping Centre seeking to streamline everyday asset and property management tasks, connect stakeholders, generate operational insights, and assist in crisis management. 

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Further capital allocations to proptech venture funds

•Fifth Wall (US) – the largest proptech-focused venture capital firm closed its first European-focused fund Proptech with €140 million of committed capital. Like prior Fifth Wall funds, the European Fund attracted the largest owners and developers of real estate, including Aldar Properties, Azora Capital, BNP Paribas Real Estate, Conren Tramway, DAMAC Group, Gestilar, Inmobiliaria Colonial, Ivanhoé Cambridge, Knight Frank, MERLIN Properties, MOMENI Group, NEINVER, affiliates of Northwood Investors, Pecunia, PGIM Real Estate, Pontos Group, Redevco, SEGRO, and Tramway Capital.

•Tishman Speyer (US) – the US-based real estate developer has received commitments of $100 million for its first proptech-focused venture fund. Major commitments were received from the National Pension Service of Korea and the Investment Management Corporation of Ontario.

• Pi Labs (UK) – the European-focused proptech VC completed its third fund at $90 million which was oversubscribed by 40%. Investors in the fund include APG, Aldar Properties, Sellar, King’s Cross Central Limited Partnership, Sino Group, Swire Properties, Kiilto, Hopewell Group and Jaeger Gruppe.

• Camber Creek (US) – the proptech-focused venture capital firm closed an oversubscribed fourth fund with $325 million of commitments. Investors in the fund include both institutional investors and leading real estate firms. 

• Taronga Ventures (AUS) – the Sydney-based venture fund focused on technology in the built environment announced new investors in its first fund, the RealTech Ventures Fund, which is targeting commitments of up to $200 million. Current investors in the fund include CBRE, CITY Developments Limited, Prudential’s PGIM Real Estate, Ivanhoé Cambridge, Nomura Real Estate and APG. 

• Willshire Lane (US) – a US-focused proptech VC has raised $40 million of commitments for its debut proptech fund. Investors in the first close include J.P. Morgan Asset Management, Nile Capital, and Morgan Properties amongst others. The fund is targeting a final close of $125 million. 

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Landmark transactional activity locally and abroad

• ParkUpp: Real estate investment company, Docklands Ventures, acquired the South African start-up for an undisclosed amount. ParkUpp is creating a marketplace that connects owners of parking spaces with companies and individuals requiring parking spaces. 

• ParkBee: Raised EUR30 million to expand operations into Europe. ParkBee is Europe’s top digital car parking platform that aims to aggregate and match supply and demand of parking spaces.

• Facilio: The AI-based proptech raised USD35 million in its series B funding from the likes of Tiger Global and Brookfield. Facilio offers real time facilities management to commercial real estate owners using IoT and AI to predictively optimise operations and sustainability. 

• Wayleadr: Raised $4 million to reinvent parking at the office by developing tools for last mile automation for commuters. The company wants to revamp the way buildings manage traffic coming to and from their properties using machine learning. 

• Clikalia: Raised EUR75 million in a series C round led by Fifth Wall and Soft Bank. Clikalia is a fully digital, end-to-end, residential real estate transaction platform based in Spain. 

• ICON: Raised a further USD185 million in its series B round to take it to a valuation approaching $2 billion. The company creates homes using 3D printing. 

• BVS: The property technology and surveying firm has been acquired by specialist professional services and technology business Davies for an undisclosed sum. 

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What we are reading

• The present and future of proptech 

• From the metaverse to the war for talent: 6 insights on proptech 

• Proptech hailed as a game-changer for the real estate market 

• Record investment driving fast growing proptech industry 

• Proptech’s prospects may rise in the wake of COVID-19 

• Why the term “proptech” will disappear 

• JLL launches proptech valuation products Valorem and AVM 

• De-risking your business: How proptech works hand-in hand with the Property Practitioners Act 

We are delighted to share REdimension Capital’s first newsletter with you. 

As a business focused on innovation technology and sustainability within the built environment, our newsletter aims to provide insights into key sector trends, new innovations and transactional activity in the South African and global markets.  

We trust you will find this interesting and informative. However, should you wish to unsubscribe from the letter, please click “unsubscribe” below and you will be removed from our communications database and receive no further correspondence of this nature.   

Should you have any comments or feedback on any of the content of this newsletter or otherwise, please don’t hesitate to contact the REdimension Capital team on info@REdimensionCapital.com.  

Sincerely,  

The REdimension Capital Partners

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Proptech: A leading growth market globally 

2021 witnessed another record year of venture capital investment into global property technology companies. In total, $32billion of new capital flowed into the sector according to The Centre for Real Estate Technology Innovation, equating to a 28% increase on total investment in 2020 and slightly ahead of 2019 investment levels. This figure is truly staggering when it compares to total global investment of only $20 million in 2008.  

These levels of investment demonstrate that technology adoption in the sector is now a well-established principal globally, notwithstanding the relative head start the developed markets have made on their emerging market peers.  

Africa is still disproportionately underrepresented in the global market for property technology; it currently accounts for less than  1% of global market share. However, the continent’s technology ecosystem is among the fastest growing in the world according to Knight Frank. It is interesting to note that Africa proptech companies raised in excess of $15.2 million reflecting growth of 55% from 2020 levels.  

Similarly, we anticipate significant growth in funding and opportunities in South African proptech sector over the coming years. 

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Successful year of attracting capital for proptech venture capital funds

The property technology sector has increasingly been characterised by a substantial amount of capital being aggregated via independent venture funds from the incumbent direct asset owners and sector service providers. Notable funds similar to that proposed by REdimension Capital for the South African market, have seen substantial support through 2021 including: 

• Fifth Wall (US) – the dedicated property technology investment manager raised in excess of $1.1bn of new capital across its funds in 2021 which includes a dedicated real estate sustainability fund (currently funded to $300 million but targeting a final close of $500 million). The funding was sourced from both new and existing investors including APG, BNP Paribas Real Estate, Knight Frank, PGIM, British Land, CBRE, Cushman & Wakefield, Ivanhoé Cambridge, MERLIN Properties and SEGRO amongst others. Fifth Wall now boasts 90 strategic Limited Partners across its funds. 

• Meta Prop (US) – another of the US’s dedicated property technology investment managers, raised its third fund closing at $100 million. This fund targets investment in early-stage property technology companies. The oversubscribed fundraise included commitments from investors that own and manage more than 1.8 billion square meters of real estate including PGIM, CBRE, Cushman & Wakefield, JLL Spark, DAMAC (UAE), Development Bank of Japan and Sumitomo Mitsui Trust Bank (Japan) amongst others.

• Pi Labs (UK) – the UK based property technology investor has also been raising its third fund targeting $75 million. The fund recently received backing from Gaedeke (US), Europi (Sweden), the FTSE-listed office developer, Helical Plc as well as Moorfield and Elkstone Partners, Great Portland Estates, Patrizia, Revcap and Assura. It is anticipated that the third fund will receive investment in excess of 100% of the combined investment quantum in Funds I and II from existing investors in those funds.

• Gruhas Proptech (India) – backed by Zerodha and the Puzzolana Group, Gruhas Proptech has announced plans to launch a $150 million property technology focussed fund in the first quarter of 2022. The fund will focus on the Indian, Middle-Eastern and African markets and on companies developing technologies that optimises and decarbonises the real estate sector. 

• Gaw Capital (Hong Kong) – as a new fund within the extensive management business of GAW Capital Partners,    $332 million has been raised to invest in Asia-focused property technology and real estate-related operating companies. Investors in the proptech fund include sovereign wealth funds, endowments and other institutional investors. 

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Landmark transactional activity locally and abroad

• OneCart: Massmart agreed to acquire a controlling 87.5% position in OneCart, one of the sellers being Growthpoint Properties. OneCart is an online shopping and delivery platform, whose partners include Woolworths, Pick n Pay, Dischem and Clicks. 

• WizzPass: US based digital workplace provider FM:Systems acquired WizzPass, a rapidly growing company in the visitor management system and workplace management market, founded in South Africa in 2015.

• Castle One: Hall and Sons invested in Castle One, a proptech venture building company focused on innovation in the residential market. This already includes Prop Data and reOS. 

• Seso Global: A Nigerian proptech start-up raised pre-seed capital. It aims to challenge Salesforce with a CRM portal that enables asset owners and agents to manage their properties, documentation and transactions on a secure blockchain database.

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What we are reading

• Proptech trends expected to dominate in South Africa in 2022 

• British land makes strategic investment into Fifth Walls Climate Fund

• Innovation offers investors exciting opportunities in Africa’s real estate markets according to Knight Frank

• How Proptech Startups Plan to Spend Their VC Money in 2022

• Proptech Shatters Investment Record With $32B VC Haul In 2021 

• 2021 Real Estate Technology VC report 

• PropTech solution sets a new benchmark in the real-estate industry

• Urban Land Institute global sustainability outlook 2022