Yesterday we revealed that real estate and accomodation had the biggest increase per vertical in the Nordics so far in 2017 compared to last year, already recording 7 more investments than they did in the whole of 2016. But what’s driving this increase? In order to get a better understanding of this we looked at each Nordic PropTech company that has raised money in 2017 and discovered three common themes.
Investors are still interested in backing ‘tech focused’ bricks and mortar
Example: Creative Makerspace
Creative Makerspace is essentially a Norwegian co-working space aimed at makers and entrepreneurs. This is the latest in a string of investments in the Nordics aimed at co-working and community hubs for the tech community. MESH in Norway raised $1 million+ last year and announced a merger with Danish Founders House, while TechFarm was funded earlier this year when Tomas Bjorkman and Dan Eriksson bought 50%. Although these could be considered pure real estate investments rather than tech investments, they are still attracting the interests of ‘traditional’ tech investors due to the role that these physical places often play in the centre of a tech ecosystem.
Searching for property within particular niches is hot
Handiscover uses a unique classiﬁcation system allowing users to select accommodation based on their diﬀerent levels of mobility/physical disability. This is fairly niche in terms of searching for properties, as rather than simply relying on a filter (that isn’t actually there in a lot of property searches) people with disabilities can go direct to Handiscover to find a suitable property for them. And these niche-based search services are also being funded when aimed at other areas. Swedish Sjohem focuses on niche locations, with a focus on marine and waterfront real estate in the country. It lists everything from posh villas on the coast to a red summer cottage by a lake, with the search focusing on the distance from the sea. This is a level of personalisation to property purchasing and renting that has not been pursued by the industry before, but in the era of online customisation is seeing a surge in popularity and is also attracting the funds to back it up.
Assistance with buying and selling a home is still an up and coming area
When you consider the significant impact that FinTech has made in improving customer experience and costs in a large proportion of daily financial transactions, it’s only natural that we see the same improvements in buying and selling property, although admittedly it feels a little behind the curve. Finnish Blok are one of those companies, with the aim of removing the estate agent as a middle man in the chain. Not only making it easier to transact but also with a considerably lower commission, think Transferwise but for property sales. And they are not the only Nordic company looking at this space, with another Finnish company RealSource focusing on the real estate professionals themselves to assist them in finding properties to buy or sell.
What’s interesting is that all of these areas, in tech terms at least, are not overly innovative, they are simply tech-enabled solutions that are better than what currently exists. Therefore, it still feels very much like property is a space that has a long way to go in terms of technology really getting a strong grasp on the sector. My personal observation (and one I alluded to above) is that PropTech currently feels like the early days of FinTech, and knowing how that evolved, Nordic PropTech is certainly worth following more closely moving forward.