In a recent AMA podcast hosted by Ravi Kumar Sapata, the founder of PropTechBuzz invited Hiren Ladva, the Head of Investment and Strategy at Aurum Proptech Limited, to share his insights on the proptech landscape in India and the investment thesis of Aurum Proptech.
This article delves into the key takeaways from their conversation, providing a comprehensive guide to the opportunities, challenges, and strategies for success in the Indian proptech sector.
The proptech industry in India is anticipated to see significant expansion, with the market size projected to increase from $5 billion in 2023 to an astonishing $100 billion by 2030.
The increase is driven by a combination of reasons, including the expanding use of technology in the real estate industry, the growing need for transparency and efficiency in property transactions, and the introduction of new business models like realty investment platforms and co-living.
SUMMARY
– India’s proptech sector is projected to grow significantly, from $5 billion in 2023 to an astonishing $100 billion by 2030.
– Aurum Proptech Ltd. identified vital opportunities, including digitization of transactions, democratization of realty investment platforms, and effective deployment of data.
– Challenges faced by the proptech sector in India, such as trust deficit, inefficiency in transactions, and lack of data need to be addressed.
– Aurum Proptech’s investment strategy revolves around supporting startups that contribute to the ecosystem, have strong tech capabilities, and are built around viable business models with a pathway to profitability.
– Proptech startups are advised to address genuine issues, build strong teams, embrace collaboration, be well-governed, and believe in the India PropTech story.
The proptech sector in India presents a wealth of opportunities for startups and investors alike. Hiren Ladva identified several key areas where proptech can make a significant impact:
The digitization of property transactions presents an opportunity for proptech startups in India. Currently, the real estate sector relies heavily on offline processes.
By leveraging technology, these companies can streamline and digitize various aspects of property transactions. This includes transparently searching for properties, due diligence, and transaction management.
There is a large opportunity available to facilitate raising capital and providing investment opportunities in real estate to a wider set of investors through various new instruments. Fractional ownership is one such model.
Proptech startups can take advantage of this demand by offering investment platforms that allow investors to participate in the journey through various means such as purchasing a share of high-yield but expensive property, providing financing to developers at the development stage, buying asset or rentals backed financial instruments.
One major challenge faced by the proptech sector in India is the availability and reliability of data.
To overcome this challenge, proptech startups can develop platforms that aggregate and analyze data from multiple sources.
This will provide stakeholders in the real estate ecosystem with insights that can improve decision-making processes, identify emerging trends, and foster innovation in product development and services.
Despite the immense opportunities, the proptech sector in India also faces several challenges that need to be addressed:
In India’s real estate industry, there needs to be more trust among those involved. This can hinder the acceptance of technologies and business models. Proptech startups should prioritize establishing trust by delivering dependable services.
The absence of easily accessible data hinders India’s proptech sector’s growth. It is crucial to encourage collaboration between proptech startups, government agencies, and other stakeholders to establish a data repository.
Partly linked to the above two, and aggravated by the need to carry out transactions offline, the bulk of the transactions in real estate today – both buy-sell and rental/leasing involve much longer decision-making and due diligence cycles.
Technology has a huge role to play in bridging efficiencies across price discovery, legal documentation, registration process as well as transaction consummation.Â
Aurum Proptech, a leading investor in the proptech sector in India, seeks to identify and support startups that can potentially transform the real estate industry. Their investment thesis revolves around the following:
Aurum is convinced that this is the most optimal way to succeed in this sector given how intertwined various business models are around the core assets i.e. residential or commercial properties. Further, the same customer as well as the same transaction has the potential to provide multiple opportunities for value exchange, and the same needs to be tapped into efficiently and effectively.
Technology has to be at the core of its every offering, as Aurum believes that is the only way to bring in transparency, convenience and efficiency.
Using Data Science and AI, Aurum aims to leverage its relationships with a wide range of participants across the entire property life cycle to add maximum value to them.
Aurum remains aligned with its belief in building viable and long-term businesses and hence prefers to partner with ventures that have a visible path to profitability.
For proptech startups aiming for growth and long-term success, Hiren Ladva offered valuable advice. Hiren Ladva guided proptech startups seeking to expand their businesses and achieve success.
Proptech startups should prioritize addressing the actual challenges faced by stakeholders in the real estate industry.
This entails comprehending the pain points of property buyers, sellers, developers, and other participants within the field. Thorough market research is crucial for identifying these issues and developing solutions.
Collaboration plays a role in achieving success within the proptech sector. Startups should actively seek opportunities to partner with entities in the ecosystem, such as developers, brokers, and financial institutions.
By working together, startups can leverage each other’s strengths. Create more comprehensive solutions for customers.
Proptech startups must not only remain compliant with all laws and regulations but should also build internal processes around governance, policies, and processes.
Leaders should believe and trust that getting regulated is a good sign for the long-term growth of any sector, especially where a lot of capital exchange is involved.
There is a huge opportunity available in India’s PropTech evolution over the next decade and more.
Pick up the right spot, the right product-market fit, remain viable and no one can stop you from growing!
The proptech industry in India is positioned for significant expansion in the upcoming years. Proptech businesses provide a significant chance to tackle the difficulties and inefficiencies within the real estate industry and stimulate innovation.
By prioritizing the resolution of tangible issues, fostering robust teams, engaging in effective collaboration, and maintaining awareness of regulatory changes, proptech businesses may strategically position themselves for triumph in this swiftly changing environment.
By Proptechbuzz
By Ravi Kumar
