A brand new proptech accelerator backed by one of the world’s largest trade associations has opened its doors in Australia, looking for local property startups ready to scale up their offerings.
The accelerator, REACH, has been running for seven years in the US. Its launch in Australia is being spearheaded by renowned local angel investor Shelli Trung, who until recently was working with Queensland University’s Creative Tech accelerator.
REACH is run by the USA’s National Association of Realtors (NAR), and financially backed by NAR’s venture arm, Second Century Ventures, which has a total of 82 companies in its portfolio.
Trung, who will be joined by director Isaac Holmyard to run the accelerator, tells StartupSmart while it’s REACH’s first time operating in Australia, it’s not its first experience with Aussie startups. Local players such as ActivePipe and RateMyAgent have come through the accelerator in recent years.
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For Trung herself, this is a return to her area of expertise. She’s been a proptech investor for the past 15 years, and has even been a mentor for REACH in the US in the past.
“I’ve seen the real estate industry start from effectively zero after the GFC, and my passion has always been in proptech. I’m excited to be back where my network and skillset is, somewhere I think I can move the needle,” she says.
“Australia has things like Stone and Chalk and Fintech Australia for fintechs, but there really isn’t anything for proptech, bar a couple of VC funds.”
“We had Aconex sell to Oracle for $1.6 billion, but they never seemed to get the same traction as the Canvas and Atlassians of the world. We’ve got a huge real estate sector here, with real potential to grow.”
Although she admits she’s biased, Trung says proptech in Australia has the potential to be “bigger than fintech”, as she believes there’s opportunity for startups at all points along the value chain, from mortgages to home services.
“It’s anything that enables the real estate industry,” she says.
SAFE investment for startups
Between six and ten startups will be accepted into REACH each year for the next three years, with the accelerator targeting scale-ups rather than startups, and looking for businesses with well-established MVPs that want to “multiply their bottom lines”.
The companies will have access to the 1.3 million real estate agents on NAR’s books, along with coaching, mentoring and invitations to exclusive real estate conferences and events.
Additionally, each accepted startup will receive $100,000 in investment from the company. Trung says the accelerator has chosen to offer the capital through a SAFE note, a relatively rare form of investment agreement in Australia, which provides investors with the right to purchase shares at an agreed price in a future round.
“We know that SAFE notes have their pluses and minuses, but we’ve found it’s the most founder-friendly way to approach investment, and it means we’re not stuck on debating valuations with companies,” Trung says.
Unlike many other accelerators in Australia, REACH is looking for more established businesses, and not necessarily those strictly in the property space.
“We’re looking for companies ready for that mid-to-late stage, and across any scope. You could be a $20 million-revenue business but wanting to crack into the real estate industry,” she says.
The accelerator opens for applications on July 15, but Trung says it’s already had significant interest from local startups, and encourages all companies to apply, even if they’re early-stage.
The team is also keen to find bigger property companies to collaborate with for the program, with Trung noting it’s a space that can be a tough nut to crack.
“It can be hard tackling the real estate industry, but if we can get old and new companies to collaborate and work with each other, that’s where we can play a role in supporting the whole industry,” she says.