Impact of Covid-19 on Real Estate Industry and PropTech (Part 2 of 3)

Interviewer:

He adds a what? I'm sorry.

Zain:

A temperature sensor along with the facial recognition device. And the AI was so powerful, you could literally run past it, it would capture your face and recognize and open the gate for you in time. There's a video of the founder jogging, right? And he's jogging quite fast and the gate opens, because he's, you know, be recognized as an authorized person.

So, now, when buildings are trying to know who is in the building and they're trying to ensure compliance, they also want to make it all contactless, this is a great solution for the future. So, we made an investment into the company.

Initially, I realized that this company has so much potential, and shouldn't just be limited to officers. You know, this can be used anywhere. In our senior care homes at Bluefield we realized, you know, rather than having locks around to enter the medicine cabinet, even, it'd be great if staff could just go right up to the medicine cabinet because they're in a rush and they need medication urgently, just go up to it and it opens up for you. Or the back door entrances or the front door entrances. So, now, our vision is really doing well. They're actually doing a pilot in Newark Airport.

So, Daniel, the co-founder of the company, he moved out to the U.S. recently. In New York, he’s already doing a trial in a huge skyscraper. He's doing a pilot in Newark Airport right now. He's doing trials, and he's got revenue coming from football stadiums and he's got offices. He's now got clients across Germany, UK, Russia, and now U.S. This company is going to be explosive. You know, and COVID has really helped accelerate trends. And some startups who have taken advantage of that are going to see this tailwind like they've never seen before.

So, OVision was a company that was sort of more established. It was... You can call it pre-seed at the time, but it quickly became seed and now it's growing so fast. It's probably closer to a series A stage company. So, great investment there.

And then another company we invested in was Canopy Analytics. So, I joined the board of Canopy, and we led the seed round. They ended up raising $2.8 million. And we really understood the problem. Canopy solves the problem of transparency and communication when it comes to management of real estate.

When you have a property manager running your asset for you, you're relying on them. And often what happens is your inbox is flooded every day, with weekly reports, with pictures. Sometimes we miss an email and we delay a project because we forgot to give an approval.

I mean, we're human beings, for God's sakes, right? This is what happens, you know, even trying to schedule this podcast, right? We had a back-and-forth email chain. And if one of us misses something, we can delay things by weeks.

Well, you don't want that in real estate, you've got doubt in your property. And if your property manager is waiting for approval, that's a problem. So these guys created like a Slack-like solution, where you can log in, and you can see everything transparently. It highlights all your key metrics.

It lets you know what's going well, what isn't. You can zoom in and dive in and see every detail, from your financials to your expense reports. Your property management team can assign new tasks. You can assign them tasks. We had a lady who slept on a railing in one of our buildings, and she broke her hip.

The amount of paperwork that was involved, there were police reports, there were insurance claims, can't keep track of it. Well, now you can, through this platform. So, we invested in Sonny and Jessica, the two families who are just wonderful, and a really smart engineer there too, the CTO, Sameer.

And I would say it's pre-seed. But we had so much conviction that we wanted to lead around and now we're looking to test it out across, you know, our portfolio. We believe a tool like that can really allow us to operate more efficiently and it becomes a must have. And, you know, most VCs didn't get the pitch. And we did because we own real estate, we understand the problem.

And then another great company is InsideMaps. And with COVID happening, people weren't able to go and see buildings anymore. It was unsafe. And so, the idea was why can't you do a 3D virtual tour instead? And remember, when I started Vungle, right, we built videos showcasing apps.

The idea was that you'd see a video ad and you'd have more... You were more likely to go and download the app because you saw the video ad, rather than looking at a screenshot or a review or whatever, right, it might be, descriptions, text. Well, same here. And now the majority of listings are starting to have 3D virtual tours.

InsideMaps is one of the leaders in the space. But what I loved about InsideMaps is their vision, they want to be the Google Maps for the inside of buildings. And so, they have very powerful machine learning and AI tools now, where through computer vision, they can... You take your phone, you put it on this device like a second rotor or a tripod, it basically turns your phone around, you take photos.

Now those photos can be repurposed and used for marketing. With those photos, they stitch together a full 3D floor plan that you can browse through, as you take a scan in one location and another through the AI they're able to stitch together.

So they've got this sort of, you know, awareness of where you were when you took the photo. And that helps you have a much smoother 3D virtual tour experience. Then they started to categorize the interiors that scan the appliances. They tell you the building age, the appliance age, the appliance type, the furnishing type. When we saw that, we were like, "Wow, this is something we really need." Because when it comes to COVID, we're trying to buy buildings, we think it's a good time to buy real estate.

Well, it's very hard to do a unit-by-unit walkthrough. And if we had something like InsideMaps, we'll be able to see the whole building virtually. Someone could just come in, just snap a couple of photos, and now the whole team can literally browse through, think through how we're going to renovate.

And then we started to realize too, you know what, when a tenant moves out, there's often an argument about security deposits, right? Sometimes just don't take care of the property and the dog pees on the floor and stains it or, you know, the door is broken. And there's always this annoying situation where, you know, there's an argument about security deposits. Well, now, if you have a before and after scan, when they move in and move out, boom, I guess it's proof as you can be.

Then it hit us, then we realized, "Well, wait a second. It's not just trying to convince people to see a building and rent it or buy it, what about the insurance industry? Right? What about doing inspections or what about mortgage industry? When you take a mortgage on a property, you have to go and get an appraisal.

This company started signing up, you know, Bank of America and Quicken Loans and American Homes and, you know, it's suddenly being used by all these different verticals and they're now like 3D enterprise software. They've grown 3X since we invested in them. They're profitable now. And they're at a Series A, series B stage.

And, you know, we came in and we realized smart team, great tech, and that the tip of the iceberg is basically 3D virtual tours. It's the fact that, you know, the mortgage industry can now do virtual tours and they don't have to send human beings out. You can have a network of... You know, so InsideMaps has built, this on-demand network of gig workers who can basically come in and take a scan for as low as 50 bucks per unit. Now, that's crazy cheap, you know?

And why wouldn't the mortgage industry adopt that so they can actually, you know, do a full inspection and everything on the property? So, yeah, these are the three investments we've made. And literally, it feels like every investment we've made has done so well. And then my family office, there's probably three other companies I invested in that are relevant, actually four other companies that I invested in that are relevant.

So, first is Boxabl. Boxabl is like prefab modular homes, really smart founders. I invested in them slightly, you know, late-stage. The valuation, you know, was much higher than most startups are, but I believed in them. They had figured out that modular homes is the future. And they identified going after ADUs, which is accessory dwelling units. The idea is that, you know, even in California, there's a law now where people can put an accessory dwelling unit in their backyard, and rent it out, and make revenue. And this solves the housing crisis. So they went really after that market.

And they've figured out that the reason other companies haven't scaled is because they build this wonderful modular tech, but to transport it is such a headache. You need police escorts and you need permits. You know, things get delayed in transit. And that prohibits the cost. Sometimes the cost is more than the unit, which makes it impractical. So they re-engineered everything so you can literally put this on the back of a truck.

And now they're about to raise $50 million, they're officially raising. They have just signed with the Department of Defense, I think with an eight-figure contract. You know, they've signed up one of the world's hottest companies, I can't say who because it's confidential. But it's, you know, a company we all admire. And they're about to buy a ton of units. This company is about to change the game, you know.