It may have actually all begun with Zillow. House hunters could search the residential real estate market online, getting far more information about a property than would be found in a newspaper ad or even a real estate company website. This allowed buyers to narrow their own searches, save time, and only look at those properties they selected rather than those an agent would select for them. This was just the icing on the cake.
The Real Cake of Disruption
Enter a large number of techies who have seen a new way for individuals and companies to seek living and office space without the need for any middlemen – cutting out the brokers and agents entirely. They are innovative and well-funded and are turning the entire real estate industry “on its ear.” Here are 5 real estate startups to keep an eye on over the next year or so.
VTS
Headquartered in New York with current funding at $32M, VTS totally streamlines the process of leasing with video tours and analytics of potential properties for purchase or lease. Vlogging has come to replace the traditional photo galleries and slide shows with real time video of any property. Those looking to invest in a property can now have a complete file of information without the need to physically travel to the place.
NoBroker
The name says it all. This startup has raised $3M in its early funding campaign. The concept is simple – match sellers with buyers and renters and cut out the agent or broker. Buyers and renters get accurate, real-time information about a home, along the seller’s direct contact info.
LiquidSpace
Here’s a great little startup that has accumulated over $26M in funding. Founders Mark Gilbreath and Doug Marinaro decided to appeal to the millennial and Gen Y entrepreneurial spirit by assisting new startups in locating office space within literally minutes of their statement of need. No long-term leases. – renters can go month-to-month. And if a company has space available for leasing, it can sign up with LiquidSpace. Farewell to on-the-ground commercial leasing agents. This is particularly attractive to millennial desire for mobility.
PivotDesk
Think of an Airbnb for office space. If a company has excess space, it hooks up with PivotDesk and PivotDesk hooks that company up with those looking for that kind of space. It might be a large corporation that a temporary location while it secures its own real estate or a small startup that needs space as it grows. Always short-term leases. To date, PivotDesk has about $7M in funding.
FundRise
We now have crowdfunding for real estate. Real estate companies can pool their money and allow small investors to get into real estate with lower cash commitments and a less risky and higher return than their investments in other platforms. Angel investors in FundRise startup have already pumped in $41M – they obviously see huge potential.
The disruption is real, and there will be no reversing of course on this one. Traditional brokers, leasing management companies, and real estate agencies will be adjusting quickly if they intend to remain relevant.