1Mby1M Virtual Accelerator Investor Forum: With Zain Jaffer, Partner at Blue Field Capital (Part 2)

Sramana Mitra: Let’s focus on the PropTech part of your work. You said you’re doing pre-seed and seed in that sector?

Zain Jaffer: Yes.

Sramana Mitra: What’s the geographical boundary of this?

Zain Jaffer: We try to stay focused on the US market. We are also open and have done many companies that plan to expand to the US. They may also be based anywhere in the world but they just happen to have US customers. Ideally, the US is the top focus though.

Sramana Mitra: I’m doing to double-click down on PropTech. How do you analyze the trends? What are the key developments in the market?

Zain Jaffer: So much opportunity. When I started my company back when apps were taking off, I looked at five areas and I had to pick one. Every single one of those five areas resulted in multiple unicorns. Even the top five companies in each of these categories became unicorns. When I look at real estate and PropTech, there were 50 categories. Even if you’re not the number one player in a part of PropTech, the market is so large that it can support multi-billion dollar outcomes.

When you analyze the PropTech ecosystem, there are a few ways to do it. One is based on a workflow where you look at the stages of work that are required in a transaction. The other way to look at it is by dividing it into asset classes. You can apply this matrix structure. I’ll give you an example.

Let’s start with the easy one. You can just take a map of the real estate ecosystem and say residential. You also have commercial real estate investments. You have multi-family apartments. You have class A high rise. You can zoom out and do the same for hotels. You can do the same for senior care facilities. That’s one way to dissect the PropTech ecosystem.

The other way to look at it is based on flow. You can apply this matrix to any one of these individual sub-areas. I’ll give you an example of a workflow for a company like ourselves. Number one, you need to identify assets. How do we identify assets today? Word-of-mouth. Then you underwrite assets.

You use spreadsheets and your gut. Literally, it’s your gut. You see so many real estate deals that are like comparing shoes. Now you’ve looked at real estate, identified it, and done the underwriting process. There are brokers involved there too.

Then you think about how to manage this. That’s where you get operations. Within operations, you have property management. That means collecting rent. That means undergoing renovation projects. It might be construction and renovation which are huge areas for disruption. You’ve got management of the asset and evaluation and analysis.

What you have, ultimately, is the disposition of the asset. That’s an example of a workflow-based approach. When we started out with creating this venture fund, we thought, “Let’s try to be more efficient in our workflow processes.” Ultimately, we’re a strategic investor. Strategic investors look at the world differently than traditional venture capitalists.

As time has evolved, our view has evolved too. By the time I finish running a pilot in our hotel portfolio, they’ve got so much traction that they’ve raised the next round of financing. We now think more about generic VCs where it’s based on broader trends. We do like to find startups that have synergies with our own real estate portfolio.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Zain Jaffer, Partner at Blue Field Capital
1 2 3 4