Here’s a sector I bet you hadn’t considered as ripe for the #startup picking: procurement for property managers. Now bear with me; it’s more interesting than it sounds.
Or at least, interesting enough for Singapore-based Pegaxis to score pre-series A funding a few months after launching. The startup raised the money from global real estate service provider Savills. The amount is undisclosed, but the deal values Pegaxis at US$1.5 million.
The process was a pain in the ass.
Pegaxis offers two types of services to its customers: one is an online marketplace that connects property managers to various service providers, like maintenance workers. The other is an online suite of tools for managers to keep track of their procurement needs and activity.
It wants to give property managers a cheaper, more efficient way of sourcing the services and products they need, while also allowing them to track the whole process.
Property can be residential (like condominiums) and commercial (as in shopping centers).
The company launched in February 2016 and entered the DBS HotSpot accelerator program in April. During that time, the team completed contracts worth US$3.9 million and now has over 260 properties on its platform, co-founder and CEO Ted Poh tells Tech in Asia.
Ted, a former corporate lawyer, started the company with co-founders Jun Rong Lim and Jacky Chong. Ted’s family runs a property management company, where he worked part-time when he was younger. That’s where he first came in contact with the world of procurements, quotations, and approvals – a process that was “a pain in the ass,” he laughs.
Pegaxis will use the funding to grow the team and continue developing its product. Hiring priorities are two more developers and a UI/UX designer.
The relationship with Savills will likely keep the company quite busy for the near future, so it won’t be spending so much on marketing. “Savills is going to integrate Pegaxis into their operations,” Ted says. “They’re effectively our number-one customer.”
Pegaxis has a first-mover advantage in this non-tech market.
“Savills’ investment into Pegaxis is in line with our focus on the digital transformation of many of the property management industry’s internal processes,” says Christopher Marriott, CEO of Savills Southeast Asia, in a statement.
Pegaxis chose a niche space to start up, which raises a few questions about scalability. Ted thinks there is plenty of opportunity, though. “Condominiums in Singapore spend US$1.4 billion a year in property maintenance,” he says. Savills, meanwhile, manages about 2 billion square feet of property in Asia Pacific.
Ted thinks Pegaxis has a first-mover advantage in this market. It’s an old industry that’s largely stuck in a non-tech way of doing things. “Most millennials don’t realize this industry actually exists,” he laughs.
Pegaxis can also safeguard against competitors by keeping its customers in its ecosystem. “The way we structure the tools, the way we archive the data, it’s very sticky,” Ted explains. The team hopes that as younger property managers take over from their aging counterparts, they will naturally turn toward technology-enabled services.
Converted from Singapore dollars. US$1 = S$1.42