Seemingly every day, another investment and acquisition from across the real estate ecosystem hits the headlines. It’s an exciting time in ‘proptech,’ to say the least.
To put all this in perspective and understand how sustainable this is, CINC CEO Alvaro Erize sat down with Chris Gough, Managing Director and head of PropTech advisory at GCA Advisors, a tech-focused investment bank. Gough is no stranger to the Inman stage or to CINC, having helped advise the sale of CINC to Fidelity National Financial and many other high-profile M&A transactions in the PropTech market, which is why we knew this would be a lively and information-packed conversation.
Erize kicked off the conversation by asking Gough to encapsulate just what has been happening from 2020 to now.
“Although there’s a tremendous amount of activity, more so than we’ve seen ever in this space, it still feels like we’re in the early innings in terms of technology adoption across the market of title, insurance, and mortgage,” Gough explained. “I would say all of them are still pretty nascent in terms of technology innovation and in terms of their interaction with the broader ecosystem.”
Now there is a new class of companies that have been able to provide a systematic approach to adding value to the industry, and the money has flocked to it, as Gough’s slides demonstrated.
“The real winners here are the consumers and tech-oriented agents who are able to utilize these tools to create a superior client experience,” Gough declared. “The consumers are getting a better experience with a real estate agent, a better set of information and transparency about homes that they’re purchasing, better information about the closing process, and tighter timeframes to close. This improved, mobile-enabled, digital experience is partially a result of all this capital coming into the market.
And so I think the industry frankly should be proud of itself for the innovation that’s helping improve what historically has been a pretty cumbersome, opaque process at the consumer level.”
“Ten years ago, most startups were about doing away with the agent,” noted Erize. “But if you look at the big success stories of the last five years, most of them have been companies (and I put CINC in that bucket) that have worked to empower the agent and to allow a group of very well prepared agents to serve more people.”
Erize highlighted it’s not just the technologies, but the investment brokerage brands as varied as Redfin and Realogy who are investing dollars to help their brands.
“As a group, the perception has been that traditional brokerages have been behind on technology development,” he said. “But some of them have had amazing performance in the last year, partially driven by continued investment in tech and expanding the monetization potential with each transaction beyond just the commission.”
In the face of the fear and speculation that overtook the industry back in March and April of 2020, Erize was steadfast then and is steadfast now, with confidence not only in the real estate sector but in the United States as a whole. He has the benefit of his perspective as a native of Argentina. Digitalization will continue to complement the professional agent in the home transaction.
“The US is still the country with the strongest entrepreneurial spirit. And it’s such an asset,” he said.