The real estate industry has been slow to adopt the technology compared to many other sectors. When Dominic Penaloza left his job at WeWork China as Head of Innovation and Technology this spring, he decided to focus on proptech in Asia.
Instead of building a startup himself or investing in one, Penaloza combines both goals by founding a “startup studio” called REinvent (“RE”, short for “real estate”). The technical jargon refers to an organization that builds startups with an internal team, hence it is also known as a "Startup Factory" or "Venture Builder". A famous example is Rocket Internet, which is responsible for building Lazada in Southeast Asia and Jumia in Africa.
Penaloza, a serial entrepreneur who left his cooperative startup Naked Hub to join WeWork China in 2018, now leads a 45-strong team in Shanghai, Taipei and Singapore, with whom he has worked for the most part on WeWork and Naked Hub. The studio is divided into so-called product groups, which are made up of product managers, designers, engineers and experts in artificial intelligence. It can work on four projects at the same time.
The founder also brought heavyweight investors on board to help the startup studio tackle a sector with deeply rooted players. REinvent's supporters include JustCo, a major collaborating company in the Asia-Pacific region backed by some of Asia's largest real estate owners, such as the GIC sovereign wealth fund in Singapore. multinational real estate developer Frasers Property; and one of the leading Japanese real estate companies, Daito Trust.
REinvent has a full stake in the companies he founded, while the three investors own equity. The company declined to disclose how much it has raised from its investors to date.
The financiers also contribute important strategic resources, Penaloza said in an interview with TechCrunch. Founded in May, REinvent has already launched two projects, including Switch, which allows individuals and companies to book workspaces and pay by the minute, much like sharing bikes. The difference is that Switch is a marketplace with third party sellers like JustCo and Frasers, while bike rental companies often deliver and operate the bikes themselves.
Today's market has a growing network of 2,500 desks in over 20 locations across Singapore, including small office cubicles that have sprung up in various malls. An on-demand workspace is proposed at a time when the coronavirus pandemic is forcing the whole world to rethink where to physically work.
"All real estate companies are considering how to respond to COVID, how they can help organizations survive COVID and prepare for the next pandemic so the business impact isn't as big as this time around," said Penaloza.
In the meantime, flexible working pods are an attractive proposition for shopping center owners, especially in China, who are looking for new tenants as e-commerce penetrates offline retail.
“E-commerce ate the traditional retail model before COVID. Developers in China are trying to reuse some of their malls … There are now a lot of F&B shops, adventure shops, cafes and even common areas in malls, ”noted Penaloza.
Penaloza tested an early version of his on-demand workspace vision at WeWork China, where he made the company's public space available to non-membership customers. It identified professionals who use Starbucks for meetings and remote work, but who have a quieter environment and better WiFi.
The other product that REinvent introduced is SixSense, spatial analysis and social distance detection software.
"Real estate is something that not many people think of, but it's one of the largest industries in the world." noted Penaloza. "Proptech in Asia and China is at a very early stage but growing."