Site logo

3 Proptech Startups with Huge Disruptive Potential

2022 Edit: Since I published this, Social Construct has unfortunately folded up. Mixing VC level returns and timelines with real estate development proved to be a large part of its undoing. I’ll do a case study on these types of proptech startups one day.

Social Construct

Founded in 2017 by Ben Huh, Social Construct has raised over $17m to date. I’ve talked to a number of modular and prefab companies over the last few years, and none of them could offer me significant cost or schedule savings on small to medium sized projects in New York City because their factories were either too far or I needed to build a much bigger building. I didn’t have much hope for the idea until I spoke with Social Construct.

Their approach to prefab is to use software to develop optimized architectural plans, then create precise material lists for stuff like wiring, plumbing, flooring, and more. Then these materials are pre cut at a local factory, numbered, packaged, and shipped to site with ikea-like instructions generated from the plans. Construction becomes more like assembly, reducing the amount of skilled labor required, and also shaves up to 20% of the schedule. From a developer’s standpoint this makes so much more sense because it creates efficiencies and optimizations in all the right areas. This is the type of technological improvement that can help drive housing prices down in the long run. Whether VC-funded proptech startups are able to find the right balance with real estate returns is to be determined. Their offer for me to do a JV deal with them made very little sense for me.

Cloud Kitchens

Next, there’s a titanic battle brewing in the kitchen. Uber founder Travis Kalanick has been making waves in New York real estate over the summer because he’s been practically the only person looking for retail space in the city. Because it’s the perfect time to aggressively expand his pandemic-friendly proptech startup, Cloud Kitchens, which is best described as a WeWork for kitchens. Founded in 2016 with over $400 million in funding to date, it provides turnkey commercial grade kitchen setups for delivery-only restaurants, so restaurants owners can focus on making food.

Cloud Kitchens also provides the technology platform and infrastructure for marketing, online orders, and delivery (through uber eats and other services of course). It reduces the risk of starting and managing a restaurant by cutting down real estate and employee costs and allows faster scalability. We’re going to see this model rapidly replace a lot of restaurants that are shutting down permanently after this winter.

I mentioned a titanic battle earlier because Peter Thiel has also thrown his hat into the ring, leading $20 million in financing for Virtual Kitchens, a direct competitor founded by more ex-Uber execs. Retail real estate is looking pretty bleak otherwise, so I will happily order some popcorn and watch these tech titans duke it out. (who orders popcorn?!)

Built Robotics

In the construction space, check out Built Robotics. I actually scoured hundreds of proptech startups to put this video together, and this one really stood out to me. Autonomous driving is a red ocean with every big tech pouring R&D into the field. But founders Andrew Liang and Noah Ready-Campbell sidestepped all the competition and found a blue ocean in construction by brilliantly retrofitting autonomous driving tech to existing off the shelf construction vehicles.

They’ve raised $33 million to date and have a pipeline of contracts over $100m in infrastructure and housing projects. So far their fleet has had a perfect safety record over 10,000 hours of operation. Not only that, autonomously operated machines use less fuel and move more efficiently, which also reduces maintenance costs. And obviously it frees up skilled labor too. I love their team and their idea and will be stalking them pretty hard.

Stay curious, and don’t forget to follow on me on LinkedIn, YouTube, and TikTok.