In our latest ‘Leaders in Property and Technology’ blog, we spoke with Vincent Buitelaar, Director at ING Ventures.
ING Ventures is the venture capital arm of ING making minority investments in early stage companies that have a strategic relevance to ING. Based in Amsterdam, but shadowing ING’s geographic footprint of 41 countries, ING has a €300 million fund that not only drives innovation within ING, but also helps entrepreneurs with hands-on support, know-how, scaling expertise and access to their distribution network.
PRODA: Hi Vincent, why is the PropTech industry so appealing to investors right now?
VB: I think this is driven by a number of elements. First, PropTech covers one of the largest asset classes in the world, this makes it very attractive to investors as technological advancements in PropTech can have profound impact on people and society. Second, real estate is highly intuitive to investors given that we interact with real estate on a daily basis (e.g. at home, in the office etc.). This makes PropTech a fairly accessible industry, even for a novice.
The momentum we are seeing today, has been in the making for years and is coming on the back of two factors:
- First, the market is maturing. In early 2018, when I started to explore the space in Europe in an effort to add proptech as an investment vertical at ING Ventures, the market was still very early in its development. Moreover, various sub-verticals (e.g. commercial real estate data, transaction management) were struggling to scale due to lack of adoption. Fast forward to today, PropTech is a healthy vertical with steadily increasing adoption rates.
- Second, the efforts by the early adopters in commercial real estate have been a catalyst for growth. Players have realised the need to use technology to keep a competitive edge in the market. As a result, the real estate industry is playing catch-up by doubling down on innovation.
PRODA: How does ING assess potential investments?
VB: As strategic investors, we look for solutions that support ING in delivering on its strategic priorities. This starts with the identification of an opportunity or challenge. In the next step, we evaluate three options: (i) build at ING Labs (e.g. Homigo), (ii) partner through ING Fintech Partnerships (e.g. WiredScore), or (iii) invest via ING Ventures (e.g. PRODA).
9 out of 10 times we can partner with an existing provider. However, occasionally we identify teams that are working on revolutionary ideas close to our own strategic aspirations. In these situations we like to explore an investment, as a means to incentivise both sides around a mutually beneficial business case.
A potential investment is assessed on three elements: team, technology and traction. We generally look for the following:
- A complementary team with deep sector and tech expertise
- A unique and defendable technology with significant scaling potential
- (Early) traction evidenced by market pull
PRODA: What kinds of technologies do you think will increase in demand over the next 3-5 years?
VB: I think we will continue to be amazed by technical advancements in AI and Machine Learning. The examples are numerous, I particularly like the momentum we are seeing in vector search, a technology enabling enterprises to make better use of their data. Another application I expect we will hear more about is synthetic data. While the use cases are still early staged, we are already finding very attractive opportunities.
A different area, but just as exciting, is high-performance computing. We closely track the developments in Quantum Computing and adjacent technologies. While mass deployment is still far away, it is clear that these developments will trigger very exciting new innovations in the not so distant future.
Many thanks to Vincent for taking the time to speak with us. We will be back soon with another post as we continue to speak to leaders across the industry.