Prepared for ULI April 30, 2019 METAPROP METAPROP IS A NEW YORK-BASED VENTURE CAPITAL FIRM FOCUSED WE INVEST IN EARLY-STAGE ON THE REAL ESTATE TECHNOLOGY (“PROPTECH”) INDUSTRY. PROPTECH STARTUPS THAT PROVIDE: Since 2010, our team has invested in 100+ early-stage PropTech startups. We manage investment funds for financial and strategic real estate investors SOFTWARE MARKETPLACES TECH ENABLED IOT & SERVICES AUTONOMY representing a pilot-ready sandbox of 15+ billion square feet across every real estate asset type and global market. ACROSS… OFFICE RETAIL MULTI- SINGLE- MULTI-USE FAMILY FAMILY INDUSTRIAL STORAGE HOSPITALITY LEISURE PARKING CONFIDENTIAL 2 What Exactly is PropTech? Understanding The PropTech Innovation Landscape Today, PropTech innovation is occurring at an unprecedented scale Throughout The Full Real Estate Value Chain Space Analysis & Site Selection & Development + Process Space Usage & Payments + Identification + Diligence Financing Negotiation Construction Automation Management Services Listing • Zoning • Marketplace • Brokerage • Prospecting • Project oversight • Sales • “Basement Tech” • Rental • Appraisal • O2O • Tour • Title • Architecture • Leasing • HVAC • Utilities • Budgeting • Marketing • Comps • Econometrics • Design • Underwriting • Facilities Mgmt • Service providers • Modeling • Review • Risk pricing • Engineering • Broker tools • Security • Trade • Compliance • Credit • Construction Across Global PropTech Hubs Touching Every Asset Type Multiuse Leisure Office Storage Retail Single Family Multi Family Industrial Parking Hospitality Why Should Real Estate Leaders Care? We Are In The Midst Of A Seismic Shift In The Real Estate World VC PropTech Funding Continues To Accelerate PropTech Financing, ‘13 – ‘18YTD But Where Are We, Really? Still Early Innings In A Massive Cycle Real Estate Tech Funding vs. VC-Backed Fintech Funding (in $ billion), 2013 - 2017 private & confidential Innovation Occurring Across Every Category Of Real Estate Residential Listing Property Information Investment/Crow Mortgage Commercial Listing Marketplaces Data, Valuation & Analytics and Search Services and Search Services dfunding Tech Property Sales & O-2-O Services O-2-O Services Information Marketing Mortgage Tech Data, Valuation Virtual Viewing & Analytics Marketplaces Property/Building Management Tech-enabled Brokerage Leasing Management Software Investment / Crowdfunding Tech-enabled Brokerage Agent Services v Leasing Management Software Property Management Virtual Viewing Agent Matching ` Uptick In Growth Capital Softbank Bets on PropTech Healthy Maturation Of Recent PropTech Wave SoftBank's Vision Fund Investments Uber $9.3B Katerra $860M ARM $8.2B Improbable $500M Holdings NVIDIA $5B Vir Biotech $500M WeWork $4.4B Opendoor $400M Flipkart $2.5B Guardant $360M OYO $1.25B Slack $250M OneWeb $1.2B Plenty $200M Roivant $1.1B Mapbox $160M Fanatics $1B Nauto $160M SoFi $1B Lemonade $120M Compass $900M Big PropTech Winners Are Emerging, More To Come Public Transactions Private Transactions Company Exit Type Valuation Description Company Valuation Description M&A $3.5B Listing and search $31B Hospitality/home sharing M&A $3B Listing and search $40B Co-working IPO $2B Property mgmt. software $4B Residential brokerage IPO $1.8B Residential brokerage $4B Interior design IPO $1.5B O2O real estate service $3B Modular construction M&A $1.2B Construction operations M&A $1.2B Construction collab $4B Residential brokerage M&A $1B Listing and search $1B Construction software M&A $660M Construction payments $800M CRE Crowdfunding M&A $630M Project/bid mgmt $600M Home insurance M&A $500M Construction mgmt $300M CRE Lease management M&A $300M Leasing data Incumbents Taking Notice, Investing In Innovation Spectrum Of Engagement Options To Fit Priorities Sponsor / Accelerate Strategic Partnership Outsourced Venture Direct Investment M&A /Build What • Brand marketing • Structure commercial deals • Top of funnel for pilots & • Strategic case for heavy • Need for bespoke, captive • Employee recruitment & • Pilot evaluation & direct investments resource allocation technology engagement management • Influence, insight, brand • Full discretion • IQ to develop/maintain Why • Dip toe in water • Minimal commitment • Resource efficient • Source/win deals alone • Strong tech M&A muscle Who M&A Heating Up Recent Acquirers Span Industry Categories Where Are We? What’s Next? Snapshot: Where Are We? Snapshot: Where Are We? Snapshot: PropTech Funding Climate What Makes Us Nervous Funding Continues To Rise Sharply • $1B+ in dedicated capital has come online over the past year from new and existing sources • Risk of well capitalized companies artificially distorting markets Lots Of Noise In The Market • Proliferation of point solutions, low quality deals. Generally more to sift through • CIOs inundated High Quality Large Ticket Deals Have Yet To Catch Up To Capital Supply. • Will continue to drive price pressure/valuation creep Gap In Market For Non-Equity Capital Alternatives • Asset-heavy and/or tech enabled service businesses lack risk/reward appropriate debt options. Forced to expensive and high-growth seeking equity markets Snapshot: PropTech Funding Climate What Has Us Excited Funding Continues To Rise Sharply • Increasing supply of high quality co-investment and downstream financing partners • Growth in investor syndicates to fuel distribution • Emerging winners receiving growth capital to attempt scale Higher Volume And Caliber Of Entrepreneurial Talent Entering The Space • Rewards available for those willing to sift This Cycle Is Still Just In Early Innings, Lots More Room To Run The Upper Bounds Of Success Have Been Redefined Rise Of “Full Stack Startups” Sparking Investment Flywheel Forecast: Next 12-24 Months Funding Environment To Remain Robust/Increase Throughout All Stages • Challenger/enabler cycle to continue to spin faster and faster Several Multi-billion Dollar Companies Will Be Born Over The Next 2 Years • Dozens of categories that remain ripe for disruption Breakout Velocity To Occur Increasingly Early In Company Life • Powerful early distribution syndicates forming – MetaProp positioned to remain at center of this activity • Growth stage capital eager to scale perceived early winners A Growing Number Of Real Estate Incumbents Lean Into PropTech Increasingly Seriously • Watch for onset of trough of disillusionment amongst firms who rush/rushed in haphazardly Multi-pronged Exit Environment To Remain Active Absent Sharp Secular Market Downturn Macro Risk Of Recession And Pullback In Real Estate Prices/Rise In Vacancy Thank You MetaProp [email protected] www.metaprop.vc PropTech Place @zschwarz 214 West 39th St., #705, New York, NY 10018 private & confidential.