In the lead up to the Australian Proptech Summit 2022, and in part one of the Proptech Investor Series, we interviewed Shelli Trung, Managing Partner at REACH Australia. With estimates of over $20 billion invested in commercial real estate over the last decade, we wanted to know which specific innovations are attracting investment from VCs and why?
1. Tell us a bit about yourself. Your background, current role and how did you get started in venture capital?
I started my early career in change management, basically helping small companies to large corporates upgrade their website, CRMs and other software or systems. I then bought and developed real estate in Australia and the US before starting my own startup which I sold while living in NYC. Once I exited my company, I wanted to help others with my network and fast forward several years later, I was asked to manage and grow early-stage companies through investing. I now lead the REACH scaleup program and fund for the Australia and Southeast Asia region. I mostly support Seed to Series B companies, helping them grow their engagement and understanding of the real estate sector.
2. How different is it to build a proptech start-up today than 5 years ago?
This region’s access to funding continues to improve with several global funds now in the APAC region. REACH, which is backed by Second Century Ventures, is of course one of them but others include Salesforce, Atlassian and Airwallex, who also recently announced their payments fund. There’s certainly been a rise in strategic capital overall, which is great to see for startups who are focused on B2B. On the other end, the Seed/Angel stage is seeing a number of challenges with many idea/MVP/Seed accelerators such as Blue Chilli, Muru-D and Slingshot no longer operating - very sad to see. So very early stage is harder but Series A seems to have gotten easier as corporates are more willing to open their doors. Covid also has been an opportunity with much of the real estate industry needing to go digital overnight. If you’re able to help them save time and money, they’re a lot more willing to talk!
3. A lot of innovation is coming from incubators and in-house labs, which have a lot of talent and resources. How can proptech start-ups compete?
Having been in the innovation ecosystem across multiple regions and industry sectors the last 10 years, I think one of the really great things about a good ecosystem is there is a place for everyone. This includes a balance of entrepreneurs and intrapreneurs; I have been both. The great thing about being an entrepreneur is that you can combine all your areas of expertise and networks with no boundaries and move as quickly as you like. When one door closes, you can move to the next but you have limited time and resources so you need to choose wisely. With corporate innovation and labs, you typically have a fixed mandates, budget combined with layers of sign off to manage risk so while you have many resources, you might not be able to go as fast or as far as you would like. There’s also the challenge of potential conflicts to navigate. Benefits and risks are different for both and each has its place in a good startup ecosystem. The intrapreneurs frequently help drive the change in “hearts and minds” necessary for startups to sell into the business so learning how to work with each other is important!
4. What are new areas for commercial proptech that you are excited about as a venture investor?
I think one of the urgent immediate challenges that I am now regularly being asked about from CRE groups is how to reduce the environmental impact of their buildings given the sector is a key contributor to greenhouse gases from the construction phase through to maintenance. We are fortunate in APAC that we are already leading the way with the most energy efficient buildings in the world according to GRESB but there is still so much more to be done. Real estate owners and operators really do get to reap the rewards if they can successfully deploy technologies that support better outcomes for people and planet. This includes any automation ranging from minimising car idle time when search for a car park (see UbiPark) right through to building energy audits (see BOOMPower). Health and safety also will continue to be front and centre. Contactless solutions, AI driven security and sanitation technology - ie anything that helps support more of us to feel safe in our precincts will start to become commonplace.
If anyone is working on any of these up-and-coming solutions, I’d love to hear from them and they can check out the REACH Australia scaleup program; we have applications open now until 30 September for the 2022 intake. https://nar-reach.com/Australia/
Read the Proptech Investor Series Q&A with:
Carolyn Trickett from JLL Spark here.
Rachael Nuemann from Flying Fox Ventures here.
Shelli Trung from REACH Australia here.
Jonathan Hannam from Taronga Ventures here.
Join us at Australian Proptech Summit 2022, 22-24 February to hear from more leaders in the proptech field and the trends to look out for.