Pandemic pushes proptech development to new highs

Property technology, such as VR and big data, is conquering the previously analogue real estate sector, Photo: Shuttlestock

Vietnam now has less than 60 proptech startups working towards creating one-stop shop destinations for customers.

While COVID-19 poses great challenges to the economy, it helped to re-shape services and facilitated the creation of new services for the market.

Previously, property trading was mostly done via transaction centres and agencies while brokerages were the bridge connecting developers and buyers. However, with the limitations on travelling and personal meetings during the outbreak, digital terminals are now replacing direct interactions – increasing demand for proptech startups.

Propzy has recently received $25 million from Gaw Capital Partners and Softbank Ventures Asia. Rever, another proptech startup, also got $4 million from VinaCapital Ventures.

Propzy is also backed by many other investment funds, such as Next Billion Ventures, RHL Ventures, Breeze Investment, FEBE Ventures, RSquare, and Insignia Ventures Partners.

John Le, founder and CEO of Propzy said that the $25 million investment will be used to develop new products to simplify real estate transactions and back up services for the whole life of a property, from purchasing, selling, and leasing to management, including financial support for customers.

Hoozing, meanwhile, has secured an undisclosed amount of funding from South Korean venture fund Smilegate Investment. It is now launching an app which uses the company’s database and agent network to help landlords and customers find the right deals. It will bring together more than 50,000 properties and 7,000 agents from the Hoozing ecosystem, according to a company statement.

Homebase has also received $310,000 in pre-seed funding from Antler and Iterative – two Singapore-based venture funds – for its startup project in Vietnam, a financial tool to help customers buy houses when they do not have enough money.

Other startups jumping into the game include RealStake, Vietnamese property portal Batdongsan.com.vn, Homedy.com, Luxstay, and PropNex.

With 64 million internet users, accounting for 66 per cent of the population, Vietnam is quickly adopting smart technologies and has promptly caught up with the rest of the world.

The proptech market in Vietnam is estimated at $500 million, and according to ESP Foundation, a Singapore-based fund investing in startups in Vietnam, the online advertising industry in the real estate market is valued at $100 million.

The most notable segments of the proptech ecosystem in Vietnam are tech-enabled residential property brokerage, leasing, and property management.

According to JLL Vietnam, while traditional mindsets and the high need for trust in the real estate industry are something of a setback, the prospects for proptech in Vietnam are still positive due to the young demographics, tech-savvy population, and available funding and incentives for tech startups in Vietnam.

As more competition enters the market, prices will decrease and proptech will become more accessible. In the future, the growth of proptech will require a need for wider and better-quality network connectivity in Vietnam.

While proptech services are few and far between on the market at present, it is a good time for smaller or newer developers to enter.

On the other hand, local investors are hard-pressed to keep up with international players with large capital flows and new property concepts entering the market. Global trends such as proptech are shaking up the market but local developers are certainly less experienced in adapting to such disruptions.