Sydney-based real estate venture capital firm Taronga Ventures has launched its RealTechX Growth Program, an industry-led, government-backed innovation program to grow real estate technology business in Australia and Asia, particularly in the Greater Bay Area.
Realtech or proptech represents the convergence of property and technology that reshapes the way real estate is built, occupied, managed, transacted and recorded. To Taronga, realtech also goes beyond residential and encompasses the office, retail, infrastructure, and urban planning sectors as well.
RealtechX’s scale-up program, which has received a A$440,000 grant from the Australian government as part of the A$23 million Incubator Support initiative, intends to bring together up to 10 market-ready technology businesses (participants) and up to 20 established firms (program partners).
The selected participants for the RealTechX program will be offered direct access to corporate customers, investment of strategic capital and expert advice on growth strategy, before culminating in a “market-linkages tour” to Hong Kong and other cities in the Greater Bay Area.
“Australia’s economic focus has always been on China and Asia,” said Julian Kezelman, program manager of RealTechX. This has long been because of the mining industries. “But, as the commodity supercycle is coming to an end, we are trying to reengineer our economic relationship with China to technology. That’s why we see Hong Kong and Greater China, particularly the Greater Bay Area, as a huge opportunity to grow technology across the region.”
RealTechX will select companies mainly from Australia. International companies are encouraged to apply for the program, where applications close on August 30, 2019, although they may have to register as an Australian entity first.
The growth program eyes established companies with innovative, readily available go-to-market real estate and construction technology that can be instantly adopted by corporate partners or deployed in a new market. “We’re seeing a huge amount of technology coming out of Australia that’s focusing on environmental sustainability, energy reduction and a greater focus on safety,” said Jonathan Hannam, managing director at the Taronga Group. “It’s forcing many Australian real estate owners to adopt these new energy-efficiency methods. If we can bring some of those into the Asian region, I think it can be pretty interesting.”
One of the Taronga-backed startups, Ynomia, is such a company designed to be scalable and easy to deploy. The Melbourne-based company provides end-to-end technology solutions for better connecting people working on construction sites by using a Bluetooth low-energy localization algorithm to track materials on site, on both a horizontal and vertical plane. “The company is already developed to a point where any customer could pick up the technology and deploy. It is this type of company that we’re hoping to introduce to the Greater Bay Area,” said Kezelman.
The use of technology to improve the real estate industry has been gaining traction in China. According to a November report by the real estate consultancy JLL, 179 startups in Asia Pacific have received US$4.8 billion, or over 60% of the world’s proptech investments since 2013, with Hong Kong and mainland China taking US$3 billion of that amount.
Last week, JLL, Hong Kong developer Swire Properties and insurance-turn-fintech company PingAn jointly launched an UrbanLab initiative with the goal of creating innovative technology solutions for the real estate industry. Targeted technology areas include automation, analytics, smart buildings, artificial intelligence, facilities management, construction, tenant experience, customer engagement, sustainability and etc.
It is clearly a sector that is getting more attention from investors. Earlier this week, Shenzhen-based online property management and community service company Colour Life announced that it has received a total of HK$491 million investment from ecommerce giant JD.com and internet security company 360.com to foster greater cooperation in online transactions, logistics and finance while strengthen its ability to leverage big data, IoT and artificial intelligence in its services to community residents.