European proptech VC A/O PropTech has launched – after raising €250m permanent capital to invest in technology companies disrupting real estate, the largest asset class in the world. With its permanent capital approach – a first in the space – the firm is able to be stage agnostic, and a more flexible and patient investor.
A/O PropTech invests from Series A to later growth stages in breakout companies, with the potential to transform the real estate industry through technology, data science and AI. To date, A/O PropTech has backed 10 companies, in Europe, USA, and Israel including Bricklane, Fornova and most recently Plentific – leading a $32mn Series B round in November 2019.
Some of the largest institutional real estate companies in Europe are amongst A/O PropTech’s investors, and combine a strategic pool of residential, commercial and hospitality assets in excess of €32bn. This portfolio is used and integrated by A/O Propech as a ready-made sandbox, to test, pilot and fast-track the commercial and operational scale of its portfolio companies – a first of this nature and scale in Europe.
A/O PropTech’s innovative approach is also reflected in its multidisciplinary expertise. In addition to real estate and finance professionals, A/O PropTech employs data scientists, mathematicians and engineers. Its senior management team has previously led large scale digital transformation projects for global banking, automotive and luxury retail groups. This expertise is applied to support its institutional real estate investors transition into more digital and data driven organisations.
To date, pure-play European proptech VCs have been lagging behind the US in terms of funding, scale, and ecosystem delivery. A/O PropTech’s launch marks a new step towards bridging this gap for the European proptech venture landscape, with the emergence of well capitalised large-scale specialist VCs.
In the fight against climate change, one should look no further than the real estate industry: it consumes 40% of the world’s energy and raw materials – and emits 30% of global CO2. A/O PropTech’s vision is underpinned by a commitment to tackle climate related issues by investing in emerging technologies, enabling decarbonisation and sustainability in real estate. In the next few weeks, A/O PropTech will be announcing additional investments in this space, at the intersection of proptech and climate tech with a European sovereign institution partnering alongside.
Gregory Dewerpe, Founder, A/O PropTech said: “As a result of the scale, granularity and historical resistance to technological disruption of the real estate industry, it will require long term capital at scale to support its transformation and digitisation. Investing with permanent capital allows A/O PropTech to stay agile and flexible, whilst removing the structural timing constraints found in traditional fund structures which create potential misalignments with entrepreneurs over the investment horizon. Part of this transformation also lies within the sector, that’s why being trusted and equipped with this level of capital and scale by some of the leading European real estate incumbents and having access to such a large ‘sandbox’ for our portfolio companies is a game changer.
The disruption of the real estate industry is a long-term secular trend, which we view as a generational opportunity. We are dedicated to backing visionary, bold and resilient entrepreneurs, building a powerful ecosystem with fellow VCs and endeavour to make a positive impact.
Real estate is the biggest cause of climate change. We are now in the midst of a profound societal shift in the fight for sustainability, with growing pressure from lawmakers, investors and tenants. This is a defining moment. An integral part of our strategy is to invest in emerging technology companies targeting sustainability in real estate and fast track them into our platform ecosystem.“
A/O PropTech’s Chief Data Officer, Othmane Zrikem, said: “We fundamentally believe in the need to gather multi-disciplinary expertise to optimise the various aspects of VC investing. The deployment of data science methodologies, combined with the integration of digitised processes and curated data sets, will help shape the next generation of real-estate industry operating models.”