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How Is The Fast-Growing Proptech Market Disrupting The European Property Finance Sector? With Michael Bristow And Faisal Butt

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Apr 27, 2022

On the first episode of season 9
of Propcast, Louisa is joined by

Michael
Bristow
, CEO and
Co-Founder of
CrowdProperty and
Faisal Butt
, Founder &
CEO of
Pi Labs. During the episode, they discuss how Pi Labs
started, as well as how the PropTech market has changed and grown.
Michael shares his journey from investor to founder, and chats
about his specialist property development lending platform,
CrowdProperty. With their ‘property finance by property people’
proposition, CrowdProperty and Pi Labs are disrupting property
finance for small and medium sized developers who have previously
struggled to access the financing they need.

Resources:

Companies Mentioned:

Key Insights From This Episode: 

 

  • We’re
    disrupting property finance for small and medium sized developers,
    where historically financial services underserved them. –
    Michael

 

  • If you’re a B2B SaaS business, it doesn’t
    matter where you are because you can build a globally scalable
    business. – Faisal 
  • If you can prove one market, you can arguably
    have the ability to scale in many markets. – Michael
  • Australia has many duopolistic markets which
    typically drive less aggressive competition between players. –
    Michael
  • Since there was such a dearth of liquidity for
    PropTech before, I find that there is more coming in now, but I
    don’t think there is too much. I believe that the market needs to
    mature and that funding is needed at different stages. –
    Faisal
  • Retention is what you need to focus on. When
    you have someone great in your team, you need to look after them
    because if not, they will go elsewhere. – Michael

Keywords: Europe, Technology, Venture Capital, Finance,
PropTech, FinTech

About Our Guests:

Mike Bristow


Mike Bristow
is the CEO
and Co-Founder of
CrowdProperty, the UK’s leading specialist property
development online lending platform. With a background in strategy
consultancy advising major corporates and private equity funds on
corporate strategy and M&A, Mike has been investing in property
since 2002, investing in high potential proptech businesses since
2014 and sits on the Investment Committee of Pi Labs, Europe’s
first and most prolific venture capital fund investing exclusively
in early stage ventures in the proptech vertical, in which he is
also an LP.

Mike has an MBA from London
Business School, is a founding board member of the Innovate Finance
36H Group alongside other leading fintech lending platforms and was
named ‘Entrepreneur of the Year’ at the Midlands Business Awards
2020.

About CrowdProperty

CrowdProperty is the UK’s leading specialist property
development online lending platform – a fintech/proptech lending
innovator, exceptionally efficiently matching the demand (quality
property professionals undertaking quality property projects) and
supply (major global financial institutions and private investors)
of capital for value-creating property projects. CrowdProperty has
built the best SME property development lender in the market,
changing the game with a distinct ‘property finance by property
people’ proposition, unlocking the potential of small and medium
sized developers to build more homes and drive spend in the UK
economy on labour, materials and services.

 Small and medium sized
property developers and property professionals have been poorly and
inefficiently served by traditional funding sources for decades.
Actual property development and investment experience lies at the
heart of CrowdProperty meaning a hands-on, expertise-led
partnership, underpinned by technology for efficiency and deep
asset class expertise for effectiveness of lending, increasing the
likelihood of success of our customer’s projects. CrowdProperty
funds property professionals undertaking any sort of property
project, structuring the perfect funding product and doing so with
greater speed, ease, certainty, transparency and expertise than
anyone in the market. As property people providing property
finance, we intimately understand market pains and built the
business around the needs of small and medium sized property
developers. 

CrowdProperty has funded over
£400,000,000 of property projects and the construction of 2,000
homes. CrowdProperty was recognised as one of the 50 fastest
growing tech businesses in the UK (UK #41 and Midlands #1 in the
Deloitte Fast50 report) and by the Financial Times as the #132
fastest growing business in Europe. Apply for finance for your
property project in just 5 minutes at
www.crowdproperty.com/apply
View video case studies of projects
we’ve funded at:
www.crowdproperty.com/case-studies 

 

Faisal Butt


Faisal Butt
is CEO and
Founder of
Pi Labs, a London-based venture capital firm focused
on backing companies that are at the forefront of digitalising the
real estate and construction sectors. Faisal founded Pi Labs in
2015, after leading the first round of investments in PropTech
start-ups Hubble and Trussle as an individual investor. Faisal and
his team have built a portfolio of over 60 PropTech companies
across the UK, Europe, North America, and Australia, making Pi Labs
one of the most active investors in PropTech start-ups globally.
Faisal is also the founder of Spire Ventures, a personal investment
vehicle with a focus on investment in traditional property services
companies. His traditional property investments include POD
Management, Beaumont Bailey, and 90 North, a real estate investment
manager which has managed $2bn of real estate assets across Europe
and the USA.

Global proptech venture capital
(VC) firm Pi Labs backs the innovators revolutionising the future
of physical spaces. Connecting next generation technologists with
the real estate world and mentoring forward-thinking founders as
they grow and scale their startups, Pi Labs’ purpose is to solve
the greatest challenges facing the real estate world through
technology and create a positive impact on our physical environment
for people, businesses and communities. Founded in 2014,
London-based Pi Labs invests in early-stage proptech startups which
are transforming the future of physical spaces across Europe –
where it is the most active proptech VC. Its portfolio companies
operate in global markets, including Asia and the US. From pre-seed
to Series A and follow-on investments in later funding rounds, Pi
Labs has grown its portfolio to more than 60 companies which are
shaping the future of our physical spaces, with more than 50% of
startups focused on addressing environmental and social
issues.

About Our Host

Louisa Dickins


https://www.linkedin.com/in/louisa-dickins-ab065392/

Louisa started her career in
property working at a well-known estate agency in London. Realising
her people skills, she moved over to Lloyd May to pursue a career
in recruitment. She now is a Director at
LMRE, who are a specialist recruitment firm driven
by PropTech and recruitment professionals, and Louisa oversees
their 5 core areas. Louisa co-founded LMRE and provides a
constructive recruitment platform to the new disruptors in real
estate. Louisa is also on the board of Directors at UK PropTech
Association (UKPA).

About LMRE

www.lmre.tech

LMRE believe there is a better
way to recruit.
LMRE focus on a more comprehensive, client led focus
delivering exceptional talent to the place at the time. They are
passionate about the industry and passionate about people’s
careers. LMRE spend time with each client to become and an
extension of the business, and their transparency and core values
help them grow with the sector. LMRE simplify recruitment and
innovate with our clients and evolve the people driven, PropTech
community.

Timestamps:

[02:40] Faisal: Why did you get
into this space and how did Pi Labs come about?

  • I started my career in California during the
    first .com boom and bust. 
  • At 25, I quit the corporate world to join the
    entrepreneurial world and set up my own tech business. Being a
    founder led me to segwaying and deciding to do an MBA at
    Oxford. 
  • In 2009, during the recession caused by real
    estate, I was looking for investment opportunities and I looked at
    investments into traditional real estate businesses. In 2013, I
    wanted to focus on the intersection between real estate and
    technology. 

[05:00] How does Spire Ventures come into all of
this? 

  • I made investments before Pi Labs that were in
    traditional real estate and I decided that if I wanted to continue,
    I should set up an Investment Management Business – a Fund
    Management Business-  and separate personal investment from
    business investment.
  • Pi Labs focuses on PropTech businesses where
    Spire Ventures focuses on traditional fee-generating
    businesses. 

[05:40] Michael: You are an
Investment Committee Member at Pi Labs, what does that mean and can
you tell us more about the move you made from being an investor to
a founder?

  • My background started in Mechanical Engineering
    and I went into strategy consulting.
  • I did things in the reverse route. I started as
    an advisor, went on to be an investor, and then went on to be a
    founder. 
  • I did my MBA at the London Business School, pre
    financial crisis. 
  • Since 2002, I have been investing in
    residential real estate. 
  • Once the investment team has filtered a lot of
    businesses and they pieced together the investment thesis, they put
    that to the final approving committee called the “Investment
    Committee”.

 [09:15] Talk us through
finding CrowdProperty and the product.

  • We are in full-on growth mode as a profitable
    FinTech, PropTech business. We fund small to medium sized property
    developers.
  • We’ve got a lot of debt capital from major
    global asset managers; over £400M worth of property projects with
    over 2000 homes being built. 
  • We have expanded into Australia

[11:05] After your third fund
raise, is the focus going to remain in Europe? 

  • After our first fund was launched in 2015, we
    were mostly a UK fund and we had one company in Bulgaria which has
    turned into a global business.
  • With our second fund, we started investing in
    the Netherlands, Finland, and throughout Europe and we wanted to
    focus on businesses that had a global thesis. 
  • Our third fund is our most international
    fund. 

[13:30] How much are you looking
to invest? 

  • We can invest anywhere from pre-seed to series
    A but our sweet spot is anywhere on the seed
    spectrum. 
  • Checks can be as small as £100,000 to £1
    million.
  • This fund has a pretty significant amount of
    growth capital reserves.

[15:00] Michael: Why is
Australia the next point of call rather than the US?

  • Most of my consulting career was spent advising
    businesses on international expansion. 
  • Australia is a smaller market with 24 million
    in population and they are in the earliest stage of the evolution
    of FinTech and PropTech. 
  • Australia has many duopolistic markets which
    typically drive less aggressive competition between players. You
    can drop in and be quite disruptive.

[17:40] Faisal: You’ve done 25 investments, is there a
direction for this fund? 

  • We are quite a dynamic
    investor. 
  • We are publishing our own research on a number
    of topics such as sustainability and ESG. 
  • We are interested in robotics and the
    metaverse.              

[20:55] What are the main
challenges which are out there for you and other
investors?

  • Sifting through the volume and identifying the
    winners.
  • There is such a dearth of liquidity for
    PropTech before that now  the market needs to
    mature. 

 [23:35] The ‘LMRE’ part,
Louisa asks the guests to talk about; 

L – Touch on the
main
 lessons you have learnt throughout your
career.

  • Faisal: Stay focused, be
    disciplined. 
  • Michael: Focus drives expertise, world-class
    talent and competitive advantage.

M – Please give
a 
mention to anyone / product / service.

R – What has been the
most 
rewarding aspect of working in PropTech?

  • Faisal: Watching businesses grow. Watching a
    founding team build to scale. 

E – What are
you 
excited about in the future of PropTech?

  • Faisal: Deploying this capital into a batch of
    really exciting high calibre startups.
  • Growing our team. 
  • Michael:  Disrupting property development,
    finance, and helping more homes get built.

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