10 min read

Ivo van Breukelen, Partner, The PropTech Connection

Ivo van Breukelen is a US-based Property and Construction Tech expert. Ivo's position at the forefront of these industries means he's uniquely placed to provide insights into where the built environment is headed. Read his insights on where the innovation hubs are and why Millennials and Gen Z are changing the face of the Construction and Real Estate industries.

How did you end up sitting where you are today?

I am, as you may know from my accent, Dutch, born and raised - Amsterdam to be precise.

I grew up there, studying International Business at the university and, after my master's degree, I decided that I wanted to explore the world. In the early days and my student time, I used to play a lot of poker. So for that reason, I travelled quite a bit around the globe.

After my studies, I moved to Asia. I lived in Vietnam for close to four years, working as an expatriate for a Dutch corporate, basically building up a satellite factory in the shipbuilding industry. I learned a lot travelling throughout Asia, which was absolutely magnificent. After that, I moved to South America, where I lived in Buenos Aires, Argentina, for almost two years. I worked for different Dutch companies there, which was also great, and I learned a lot.

After that assignment, around six years ago, I moved north to Chicago and have called it home ever since.

Initially, here in the US, I got involved in the construction industry, working for a building material manufacturer. I did that for close to two years, which was fun, working mainly with architects and developers and a lot with the big tech companies within their in-house real estate divisions; we're talking Google, Amazon and Microsoft. I have close relationships there.

In 2018, I saw a lot of things happening in the built environment. I would say construction is the biggest industry globally and, along with finance, these are two of the three biggest sectors on the planet. But, aside from their size, what they also share in common is that they are traditionally probably the least receptive industries to innovation.

If you look at digitization, so many other industries have accelerated, but not really in construction and only to a limited extent in finance. I saw it as a huge opportunity. So I decided that I wanted to utilize my skill set to the fullest extent by positioning myself on topics that revolve around sustainability, technology and innovation in the built environment. For me, this meant being in PropTech (Property Technology).

I hosted a guest lecture at Harvard in 2018 and then got to know a lot of people in that space. My business partner lives in Sydney and has worked for one of the biggest REITs (Real Estate Investment Trusts) with a $10 billion portfolio. He was running a lot of their companies and was also tasked to optimize their residential portfolio. And after that, he worked as the COO for the biggest prop-tech VC fund in APAC. So they're investing in projects, helping them.

He decided to go and work for the PropTech Connection, where I'm also a partner. We work as a bridge between investment funds and PropTech startups, vetting both sides to help each other find the most suitable partner to achieve their goals.

We're also working with MIT on our prop-tech research paper, giving them some global insights into what we see that's happening in the market. So it's a very exciting time!

What kind of work does your role involve?

What I do is build relationships, first and foremost.

So we believe that this entire prop tech industry is still a niche industry. It's a small industry, but moving very fast. So, you see a lot of capital sitting on the sidelines, wanting to enter the space to invest in it.

One big driver in Europe is, for example, the Green New Deal. That legislation is being drafted as we speak. In Europe, they penalize you if you don't hit specific targets. So that's obviously a huge driver.

So we see a bunch of activity around that and funds and investors wanting to get in. But my day-to-day, I would say, is speaking to investors, understanding what their mandate is because every single investor we talk to has different mandates. We talk to funds in Silicon Valley, Chile, Colombia, Mexico, Europe, Japan, China, India, Australia, basically all across the globe.

Funds have different metrics. Some say 'we only invest in ConTech (Construction Tech)', which is a hot topic, or some say 'only PropTech'. Then, it's a case of asking what are the metrics around it? What are your goals? How big are the ticket sizes? What thresholds need to be met for them to consider an investment, meaning, for example, what is the revenue the business needs to have? Do they need to be cash-flow positive, etc.? So we talk to investors on the one hand.

On the other, we speak to the tech buyers, the REITs, the agencies and the developers trying to understand their commercial problem and then try to fit in there the technology.

Thirdly, we have a lot of close relationships with the teams who build the products. So for them, we can help them raise capital. So we match them, let's say, with investors and sit in the middle right between all those three stakeholders. So we make that process much more manageable.

We are literally the bridge between the different parties in different countries and regions. For example, we tend to see a lot of prospects in the US that typically tend to look at Europe first - typically the UK because of language because of legal, etc. It's the biggest product market in Europe. Conversely, if a company from the US wants to enter APAC, they typically go to Australia first, before moving onto places like Singapore, which offers a soft-landing to Asia.

So, my day-to-day job involves a lot of talking and facilitating on a global basis.

I know you're excited about Blockchain, PropTech and Smart Cities. How do you see these becoming a bigger part of the real estate industry in the future, and where do you see as the leading region or country right now?

So we start with the last question, what is the leading country?

I would say the number one in terms of ConTech is Israel. Israel has very close ties with the US and Wall Street to so they tend to have also access to capital. We're see many very clever minds coming out of tech there, specifically related to construction.

Regarding PropTech, if you look in terms of the number of projects, Europe is number one.

In terms of capital allocation, I would say the US is number one. We have the largest funds here. We spoke recently to a fund that has $500 million to deploy in the prop-tech space only. So they're aggressively looking for deals.

But then it depends on the metrics because we see excellent opportunities everywhere. Right now, for example, we're speaking to an Indian prop tech, which I think is very promising. We also spoke to another in Colombia that is also very promising.

In terms of how I see PropTech becoming a bigger part of the industry, I think there are two things.

One is that if you look into the real estate industry, you have to understand the decision-making process. You see a lot of different stakeholders that decide what happens; it's a very long and slow process in Real Estate. You tend to see that, typically, the folks driving those decisions are not Millennials. Whereas if you look in the PropTech space, the folks that are building all this are Millennials. So there's a little disconnect in terms of age.

Second, if you look on a global scale, say at Europe, you see the Gen Z and Millennial generations who care about sustainability. They are also already used to the digital world and are driving demand.

Let's say in cities like New York, where you have these Millennials being tenants saying, 'hey, I want an apartment that has ABC, that has whatever technology that is, and I'm willing to pay a premium for that'. So that's a trigger for those corporates.

So I think what you're going to see is mass adoption and a huge ROI for many of those projects. It's slow, but it's coming.

What's the best advice anyone ever gave you?

Believe in yourself and never give up. When I grew up, your skillset and your reputation was built around your resume; what did you study, where did you study, what were your grades?

I think we are quickly migrating to a point where that is irrelevant. And people will tell you, okay, can you think critically? Do you dare to challenge opinions? Are you proactive? How are you as a person in terms of building relationships?

Nowadays, it's much more about, you know, bringing real-life experiences and into your day-to-day. If you have a passion for something, I would advise you to start early; don't waste your time until you're 30. Pursue your dreams and ambitions and go for it.

What advice would you have for someone thinking of entering the property industry right now?

Yeah, that's a good question!

It isn't easy to get in and build a network and get credibility. However, if you want to get in, I think there's a wealth of opportunity.

Coming in from either an investor side, if you can, is very appealing because you tend to see a lot of different companies and opportunities; you can build a lot of relationships.

However, the most exciting option is to work for a PropTech. I think that really is standing at the forefront of innovation. It's also a young, energetic environment. So I think that's the one road that gets you the quickest into this world. But it's also the highest risk one.

It's probably a good idea to get a mentor, someone active in the space, who knows it and has made the mistakes. I always call it my Dutch Uncle. These are folks that are seasoned entrepreneurs that you can have a conversation with every month or two. I think that's very insightful.

What kind of leader are you?

First, I wouldn't say I'm a leader. But if I had to define myself as a leader, I would say I'm a very energetic, ambitious leader, and I always want to engage the audience.

I think that's a powerful asset in the real estate world, being able to bring all the different parties into the room. So I always aim to be able to speak the language of the industry and give global insights.

How do you keep up to speed with what's happening in your industry?

A couple of things.

First, we are part of a lot of events in this space and, by virtue of what we do, we are at the forefront of innovation. So we speak to investors, we talk to buyers, we talk to prospects. That gives us a wealth of information about what's happening in markets because you talk to folks, and they will say, 'okay, we're building this, but my competitors are doing this'.

We are also working on a collaboration with MIT, who have their own real estate lab. We gave them some global insights as to what we see daily, and this kind of collaboration helps keep us up to speed.

The blockchain space is something that I've been very passionate about for years. I've dedicated at least an hour or two of reading every day, seeing what's being built and how it plays into the Real Estate world. I believe it will be the most significant technology that's going to disrupt the economy in the broadest sense.

What was the most challenging project or situation you've overcome?

The most challenging one that I had to overcome was moving to different continents, different cultures and different languages. Every time you move, you start from scratch.

It's not easy, but it provides you with a wealth of experience and growth opportunity. I would say that's probably the most difficult one because you also leave family and friends behind. I don't think everybody can do that. You need to have a certain personality.

You finish work today and step outside the office to find a lottery ticket that ends up winning $10 million. What would you do?

I always ask my wife this question!

Firstly, I would still work but I would l more comfortably. I would buy probably two houses, one in Amsterdam and one in Argentina. Then I would probably invest a large chunk into different ventures. But in its essence, my life wouldn't change much.

If you had one wish for the future of your industry, what would it be?

What we tend to see right now is that typically, there's a disconnect in terms of stakeholders. I believe that if millennials, for example, were to have a stronger grip on the real estate market, technology would be much more at the forefront and quicker adopted.

I think that's a process that is coming. I also think a better, more democratized decision-making process in the entire value chain would be valuable to democratize the decision-making process in Real Estate.

What's next for you and the PropTech Connection?

I think we will see a lot of disruption in this entire space, which will create a lot of opportunities. We think this industry is on the second or third inning, as they would say in the US. So it's still very early; we see a lot of excitement in the marketplace, a lot of investors, and many asset managers wanting to get more exposure into the space. There's a lot of capital sitting on the sidelines.

There's a lot of bright folks working into this space, bringing all kinds of solutions. I think in the upcoming decade, we're going to see a lot of disruption in the real estate and construction world. We're going to see a lot of digitization and taking place throughout the entire value chain, which will create many opportunities. We want to be at the forefront of that.

As a company, we see a lot of opportunities with our global reach. So I think that's very powerful. And yeah, we have some ideas as to where we believe the market is going. But I'm very excited to receive the be at the forefront of and actively facilitate all that adoption.

How should people connect with you?