- PTG acquires or partners where the requirement of speed to market is satisfied
- There is a roughly 50/50 mix of agent enhancement requests, and internal innovation
- The move into ancillary services was an internally identified opportunity
Proptech Group (ASX: PTG) has recorded significant growth since listing on the ASX in November 2020.
The company has moved from over 20% of market share to, now, 41%. In the first half of FY22, products per agent also increased from 1.06 to 1.85 and revenue grew by 98% compared to a year earlier.
It is with this backdrop of growth and progress that we speak with Proptech Group’s Managing Director and Group CEO Joe Hanna in the first of a two-part series.
Mise en scène
Proptech Group is creating efficiencies in the residential real estate process, allowing data to be nurtured and accessible as compared to having systems that don’t talk to each other.
“What agents want is a single platform that does it all, not having to log in and log out of multiple systems,” Mr Hanna told The Property Tribune.
The company seems to have the upper hand in product development, with access to 41% of real estate agencies on the Proptech Group platform.
“We will either say, ‘We’ve got this crazy idea, what do you think?’ Because sometimes you need to have a technology product view of the market and not expect agents to know. But, if we deliver them something or conceptualise an idea and then put together quick MVP, we will typically have foundation clients that will test it and give us feedback.”
Mr Hanna said the company also often receives incoming inquiries:
“Our agents are telling us where they see other products, and where they want to take us.
“It’s a mix, say, 50/50 between agent lead enquiries and enhancement requests and us hypothesising and innovating and going back to the agents and asking whether this product would work or if it is something they will use.”
The development
Proptech Group’s rapidly expanding suite of offerings includes internally developed products, acquisitions, and partnerships.
Mr Hanna said that the company “finds the balance between internal ongoing product innovation and capital expenses.”
“In terms of sheer volume, we will build more products than we buy, but in terms of ones that will move the needle in terms of having a step change opportunity of growth in our revenue, there’ll be a combination of probably 50/50 developed to acquired or partnerships”.
While considerable internal innovation is happening, Mr Hanna said the development and acquisition strategy is focussed on speed to market:
“If there’s a product out in the market that is giving us or will give us a head start an that has some superior technology or even technology that will take us too much time to build, and subject to market factors, their [the company being partnered with or acquired] willingness to sell, we will look for an acquisition.”
“The overarching principle for us is speed to market. Where we don’t find anything in the market, we will build it ourselves.
“Where we find something that’s good, we’ll partner or buy, but more often than not, if we had to choose between a commercial partnership and a build, then we’ll build.”
The data
Given the nature of the business discussed above, it comes as no surprise data is key. The depth of integration is incredible, as Mr Hanna explained:
“As soon as you hit the enquire now, every interaction from that point on is known to us. We know every time the agent calls you as a consumer, we know when you call back, when you open up their emails, if you go to an open for inspection, if you make a digital offer, and if you view the listing on their website that we host.
“All these kinds of data points help us give agents insights into the propensity of this person to purchase.”
Internal discovery, ancillary services
A $10 billion market Proptech Group identified as a target for growth was ancillary products and services.
Identifying the growth pathway was “… done more so internally, understanding what the landscape looked like. We understood from our customer base that there were pre-existing, very fragmented and fractured processes around how leads were generated to conveyancers, utilities connections, insurances and mortgages. We saw an opportunity to really streamline that.
“It’s not something that agents thought was even possible.”
We continue the conversation with Proptech Group’s Joe Hanna in part 2, looking into the company’s acquisitions, investors, and the future.
