Entrepreneur sees a ‘proptech’ future
Kiwi digital startup Re-Leased has raised $2.3 million with ambitions to become the commercial property sector equivalent of accounting software company Xero.
Re-Leased is cloud-based software that aims to oust the traditional desktop systems being used extensively by the commercial property sector.
Founder and chief executive Tom Wallace said from London that the money from local and overseas investors would be used to fast-track expansion by investing in more staff and to continue developing innovative software.
The company already has 50 staff members. Many are based at its development headquarters in Napier, with sales and customerservice staff also in Melbourne and Queensland and in the United Kingdom.
It has received Callaghan Institute development grants and exporting support from New Zealand Trade and Enterprise.
The subscription-based software was targeted at commercial landlords and property managers who could gain economies of scale and save time by automating business processes, the company said.
The software included invoicing and arrears management, lease events, document storage, building maintenance, accounting and reporting. New mobile apps allowed tenants to lodge maintenance issues and view important dates and documents.
Founded in 2012, Re-Leased processes more than $250m in rent a month for more than 500 companies in more than 40 countries.
Its software platform was managing 35,000 properties for commercial landlords and property managers, with Australia and the UK the focus of expansion ambitions. The UK was its largest market.
‘‘We are looking to bring in more customers and larger customers,’’ Wallace said.
He declined to reveal the company’s annual revenues.
Heading international expansion from London, Wallace said that after working for a year for his father Jonathan’s commercial property development company, Wallace Developments, in Hawke’s Bay, he found he was more fascinated by technology and what technology could do for the commercial property sector.
Re-Leased customers have the option of integrating the company’s software with Xero’s accounting software.
‘‘This creates a game-changing solution because the two systems can work together as if they are one,’’ Wallace said.
Major New Zealand customers include NAI Harcourts, Barfoot & Thompson, APL, plus Cameron and Ray White in Australia, and Collinson Hall and Commercial Property Partners in the UK.
Commercial property was facing unprecedented disruption from emerging technologies, Wallace said.
In the property sector this is being called ‘‘proptech’’ – a buzzword encompassing how technology is affecting the sector.
Wallace said a lot of investment was taking place in proptech around the world. ‘‘It’s about giving commercial property managers and landlords modern tools.’’
He said market rivals were expensive, cumbersome, outdated and had been designed for residential property rather than commercial property.
The company’s new shareholders brought extensive commercial experience, industry knowledge and connections.
They included Gerard Gillespie, co-founder of EziBuy, and Kent Gardner and Paul Kendrick, partners in London private-equity real-estate business Evans Randall Investors.
Wallace said he expected to raise more money again in the next 12 months, probably from private investors.
‘‘We won’t be listing on the sharemarket in the short term.’’ Paper Plus is embarking on a ‘‘transformation project’’ to be rolled out nationwide after the first concept store in Barrington Shopping Centre, Christchurch, is tested on customers.
There are 115 franchised shops around the country facing a variety of common retail challenges.
A Paper Plus in Feilding recently closed, and one in Merivale, Christchurch, did not have its lease renewed and was replaced with a Whitcoulls.
Paper Plus Group chief executive Sam Shosanya said retailers must become innovative and sharpen their focus on selling points which distinguish them from online stores.
Store designs will be tweaked based on customer response and feedback, and other shops opened around the country.
The company said the new plan will allow franchise owners to convert to a concept store by selecting various design options most relevant for their customers and their budgets.
Paper Plus has also developed joint ventures such as an in-house publishing business with industry expert Bill Honeybone, and a wholesale sourcing business with United Sourcing Group.
The recently opened shop in Barrington is the flagship for the first phase of the nationwide transformation project and builds on market research from across North America, Europe and Asia.
The aim of the new Paper Plus strategy was to encourage people to spend more time in shops by making the outlets more welcoming.
The new Barrington shop was designed around several ‘‘experiential zones’’ including spaces to try the range of stationery and play with the latest games and toys. Exclusive Paper Plus books and toys will be revealed leading up to next Christmas.
The new shop also includes a community calendar to show local events and a mini-library where customers can exchange books with other community members.
Shosanya said the future of retail wasn’t just about robots and automation.
‘‘You can’t touch, see and feel [products] online. You can in your local bookstore.’’
He referred to a recent speaker at the Cannes Lions Festival, Apple’s Angela Ahrendts, who predicted that in the next five years, 75 per cent of people will shop online, but 75 per cent of the business will still be done in physical stores.
According to a recent survey people visit up to seven local businesses per month, spending between 40per cent and 55 per cent of their monthly budgets on local products and services.
On the technology front, Paper Plus undertook a hardware and software upgrade of its network in 2016.
Servers were slow and coming to the end of life, and their Spark network was being retired.
Intellium designed and built a private wide area network and manages data at its data centre.