Melbourne-based startup XY Sense has raised $5 million in seed funding to help it meet the growing demand for its smart sensor technology that helps businesses understand how to best use their workspaces.
Launched at the end of 2017 by founders Alex Birch and Luke Murray, XY Sense combines physical sensors with analytics software to show employers how their workspaces are being used.
The artificial intelligence-powered platform offers real-time insights into everything from how desks are being utilised, to when and how meeting rooms are being used.
The funding round includes Blackbird Ventures, and a number of entrepreneurs and angel investors, including former CEO of Outware Mobile Danny Gorog, LIFX CEO Marc Alexander, and Sandy Kory, an investor in Canva and Palantir.
The round coincides with the launch of the startup’s Software-as-a-Service analytics platform, which Birch told SmartCompany is an “evolution” of the company’s capabilities.
“XY Sense was born because large entities rarely understand how well their space is being used,” Birch says.
The startup aims to “unlock and uncover” how spaces are being used, and then provide data for how to use them better.
“It’s about getting the balance between utilisation and effectiveness,” explains Birch.
When employers first see the real-time data from XY Sense’s system, Birch says most have a “lean forward moment” where it suddenly becomes clear to them how their teams are actually using their spaces. Many, he says, accidentally swear when they see the heatmap for the first time.
The founder gives the example of meeting rooms.
“One of the big problems we hear is ‘it’s hard to find a meeting room’. For example, in some workplaces, it takes four weeks to book a room,” he says.
The company’s senses pick up how many people are in fact in these meetings, and often, the average number of people in a meeting is far lower than the capacity of the space.
“You have one or two people in a room, or one person on the phone,” he says.
Seeing this information in real-time helps people “trust the data”, Birch says, explaining access to data will become even more important over the coming 12 months as Australian businesses make long-term decisions about their workspaces post-COVID-19.
“’Measure before you act’ is a big thing we’re talking about,” he says.
New Zealand a “lens into the future”
Birch says the level of interest in XY Senses has grown in recent weeks as businesses in some parts of the country are now at the point of considering what their future spaces should look like.
To this end, the company has released a number of new, real-time social distancing and desk integration tools, to help companies monitor how desks are being booked and used, create alerts when social distancing is breached, and target cleaning services effectively.
While Birch says “everyone is trying to scramble to build tools to make workplaces safe”, given the high rate of coronavirus transmissions that can occur at work, he says the clients his team are speaking with are being pragmatic and looking for “long-term solutions” that will be appropriate well into the future.
“Desk booking is a classic case,” he says.
“It wasn’t that popular in recent years because people were doing more activity-based work. But it’s a good way to manage supply and demand, and restrict the number of people coming into an office.”
But while the company is currently seeing almost all of its clients using some form of desk booking, he doesn’t think this will become a permanent fixture of Australian workplaces when restrictions are eased fully.
“I predict once COVID is gone, desk booking won’t be needed,” he says.
So, how will Australian workplaces change in a post-COVID world? Birch says New Zealand provides an interesting case study or “lens into the future”.
Offices in New Zealand don’t currently have the same social distancing restrictions as in Australia, as the country has essentially eliminated the virus, and as Birch says, “you can literally hug in the workplace if you want to”.
But, XY Sense is “still seeing less utilisation, or different utilisation”, in New Zealand workspaces since the pandemic began.
“So what does that point to?
“Are people coming into work to collaborate more, because they are able to work from home better than they have been, so they are focusing more at home and then coming together to collaborate?
“It’s early days, but we’re really interested in understanding what is going on,” he explains
“The problem they’re solving isn’t small”
XY Sense employs 15 staff, predominantly in Melbourne, and has earmarked its seed funding to help grow its team, including in customer service and sales, as it pursues plans to expand in Australia and the Asia Pacific, as well as into the US and the UK.
The company works with a range of businesses in terms of size, from global corporates with 350,000 people in offices worldwide, to companies with 100-200 employees. However, the tech is more appropriate for those businesses with 1000 desks or more, Birch says.
Prior to launching XY Sense, both Birch and Muray worked in the real estate technology space; Birch co-founded corporate real estate management software company Serraview, where Murray also held technology leadership positions.
In a statement, Blackbird Ventures partner Nick Croker said this experience was an important factor in the VC fund’s decision to invest.
“When we make an investment, we look for founders that have successfully navigated the idea maze of their industry,” Croker said.
“Alex and Luke are exceptional engineers who have a deep understanding of the needs of their customers because they’ve served them for nearly two decades.”
Croker said XY Sense is “opening up whole new possibilities” for employers and managers in what is a large market.
“The problem they’re solving isn’t small,” he said.
“In Australia alone, the commercial real estate industry is worth around $23 billion a year and space is usually a company’s second or third largest expense.
“But in 2020, real estate teams are still having to make high stakes planning decisions in the dark because they can’t access data they need.”