With a massive market, easily understood product, strong team and upcoming favourable regulatory change, Propstack looks ready to seize the commercial real estate opportunity in India. Co-founder Raja Seetharaman shares his thoughts on the same.
Tell me about your founders and how you started?
We are three co-founders with backgrounds in Commercial real estate (CRE) (Insignia, JLL, Colliers), Banking (Deutsche Bank, Kotak), Analytics (Fractal) and residential group buying (Groffr). My personal background has been 15 plus years with Insignia (acquired by CBRE), Colliers, Ascendas (Singapore government company) and JLL as their National Director of Corporate Solutions.
We realized in early 2013 that there was no transparency in the Indian CRE market place and clients always referred to how decision making was inefficient, subjective and difficult. At the same time, we were also aware of data information sites in the US and how they could be a great enabler in some ways and disruptor in others. CRE is the largest asset class in the world and also the top two cost center for most corporates depending on the office location.
We saw this as a huge opportunity and decided to start Propstack.
What stage of growth are you at and how has the journey been?
Our journey has been very exciting. We started Propstack in June 2013, raised angel funding and covered data in Mumbai. We raised our Series A of USD 3.10m in June 2015 from Daily Mail Group (DMGI) with minority participation by Real Capital Analytics (RCA). We are now present in the top seven cities in India and cover 100% of all investible commercial buildings in the country. Our clients are funds, corporates, Developers, brokers and high-net worth.
Did you have any previous startup experience?
Yes, two of the co-founders ran a boutique real estate advisory business while the third co-founder ran an online residential group buying firm for couple of years prior to starting Propstack.
What have been the biggest learning in terms of starting your own business?
Personally my fear of failure was easily outweighed by my hope and expectation for success. Professionally, commercial real estate has been a slow adopter of technology. That said, it’s been an exciting journey thus far and I am loving it. We’re at a nascent stage of intersection of CRE and technology in India and it has its own unpredictability. When we find a solution to a specific problem, we are adding value to our business as well as the industry.
How have you found the challenge of hiring staff as you grow?
We’ve had hiring challenges especially for specific functions like sales and senior tech talent who can quickly grasp the CRE tech industry. As a young company, it’s important for us to not only find talent with the right skill sets but also find them at the right cost.
What is the business model?
We are a SAAS platform and our business model is subscription based.
Can you give more details on how your clients use the data – is it mainly for acquisition due diligence? Rental benchmarking?
Propstack conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information in India. Our suite of online services enables clients to analyse, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities.
Propstack covers the commercial real estate hubs of Mumbai, Pune, Bangalore, Chennai, NCR, Hyderabad and Kolkata. Propstack’s online service provides subscribers access to a diverse range of commercial real estate information: detailed building information, analytics, client stacking, availability/vacancy, transaction details and trends – catering to all Commercial real estate research requirements.
We are proud to serve a wide variety of professionals working in corporates, funds, rating agencies, brokers, owners, developers and vendors. Propstack is relevant to anyone who has a professional interest in commercial real estate.
Who are your competitors in India or globally?
Our platform is globally scalable and some of our products are customized to India centric requirements. In the current form, we are not aware of any other company in the world that offers a similar tech platform. That said, there are a few companies that currently offer products similar to ours. Exceligent, Costar and Compstak are some of them. We offer real time data and analytics covering supply, demand and vacancies at a macro and micro level. Propsense, which is our analytical engine is one of its kind globally. Our COMPS data are abstracted sale and lease information from registered agreements with the Government of India. It’s important to note that these are registered/verified data and not crowd sourced or based on ‘hearsay’.
How similar are you to Compstak in the US?
Propstack and Compstak are neither competitors, nor similar. As mentioned on www.propstack.com, we provide all kinds of data on Indian commercial real estate which includes verified rent and sale transaction data. Some points to highlight:
- Propstack’s philosophy is to provide transactions based on verified sources
- Propstack solely focuses on office assets
- Propstack additionally provides real estate intelligence in terms of research and analytics to paid subscribers
- Access to data at Propstack is paid because of the premium nature of the data
Your data is from government registered leases – does that mean all commercial leases are registered with the government? Is that the only source of verified information?
Yes all commercial leases need to be registered with the government to make it ‘legal and valid’ and that is the only source of verified information. We are the largest repository of this information after the Government of India.
Do you have expansion plans beyond India?
Yes, we are currently beta testing data for 2 other countries in Asia Pacific. While our tech platform is scalable globally, we would like to stabilize our India operations prior to expanding overseas.
Does your data verification approach mean you can only expand to certain countries? Eg. In Singapore leases are confidential.
No, it does not limit our expansion plans. We are well aware of potential country specific challenges and have concluded that our platform and technology is scalable. I’d prefer to not get into specifics at this stage.
Do you plan to raise more capital?
Yes we are planning a Series B round in the next 6-9 months.
How would you describe the evolution of proptech in India?
India may be a notch below the US but a notch above Europe. Also, I believe that residential tech is more evolved in India than CRE Tech. While we have seen significant funding into a few residential tech companies, CRE tech has been slow to get off the ground. That said, with the imminent introduction of REITS and few other policies by the government, we expect CRE tech to catch up soon.
Source: Disrupt Property
