What is prop tech?
We would define Proptech as: Property Technology – the application of technological innovation to help improve the real estate market. The digital real estate ecosystem that Parcl continues to mention is closely connected to that of the prop tech industry.
When we think of our understanding of digital real estate and the Web2 prop tech sector, the key difference is that digital real estate focuses mainly on Blockchain technology, whereas if you want to be considered a proptech company, it doesn't require the use of blockchain tech, any innovation tech will do.
Let's chat more about what it takes to be a prop tech company.
Real Estate Technology: What Makes A Prop tech Company?
So, there are some clear objectives that a company must fulfill before being defined as a proptech company.
The most obvious is that it has to operate within the real estate industry. The main priority of a proptech company is to solve an issue or significantly reduce stress on a current outdated system by reducing admin tasks for brokers or tenants, streamlining transactions, and reducing the chances of fraudulent applications.
With real estate being the world's largest asset class, it commonly overlaps with fintech. This is where our digital real estate ecosystem of synthetic real estate trading, secure and fast property management platforms, and fractionalized ownership comes into play. The digital real estate ecosystem can be considered an arm of the proptech sector.
Five Examples Of Proptech Companies
1) Parcl - A synthetic real estate trading protocol. Parcl allows you to invest in US neighborhoods without owning any physical property. It's great for both beginners and experienced investors.
2) Propy - Propy is a real estate transaction management platform that utilizes blockchain technology in order to keep transactions trusted, secure, and faster than traditional methods. They also sell real estate NFTs, which have recently hit the headlines.
3) Zillow - Zillow aims to simplify, digitize and streamline the buying, selling, and renting of property for its users. It's now the leading marketplace for real estate with over 120 million active listed properties.
4) OpenDoor - Vendors will bid to sell a property; OpenDoor then accepts the property at a discounted rate, mainly for those looking to sell fast. This payment includes all the fees and helps property sellers avoid long closing periods. The property is then refurbished and listed for sale.
5) Reonomy - Reonomy is a software database company that sells data and machine learning-based insights to agencies, brokers, and investors. It's currently one of the most successful proptech companies in the US.
The Real Estate Industry Without Proptech
Forbes reported that property technology from the years 2015 to 2019 had grown by 1072% and had no signs of slowing down as our world propels itself to digital reliance.
When asked, 81% of real estate businesses agreed that they plan on using new digital technologies in their processes.
The general understanding is that the real estate sector is incredibly slow at adopting new technologies and systems. Thankfully, with younger people entering the real estate market, this view is beginning to shift, and hopefully, we'll begin to see a faster, more secure industry, and that can be done by more people using the technologies that we outlined above.
The time of doing everything by paper is gone, it's time we upgraded this industry, and the above companies are trying to do that.