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As the pandemic-induced demand for real estate accelerates, large property managers are boosting their investments in digital technologies to help manage their various buildings. Even pre-pandemic, 95% of real estate companies had someone responsible for running point on digital transformation and innovation efforts, according to a 2019 KPMG survey. Most cited the need for improved efficiencies, cost reduction, enhanced decision-making, and better asset management.
The same survey found that hurdles stand in the way of adoption, however, including unclear return on investment, a lack of a designated person to drive the strategy, and a shortage of in-house talent. To help tackle the challenges, some real estate companies are looking to outside firms, like New York-based property operations software developer Facilio. Ahead of future growth, Facilio today announced that it raised $35 million in series B financing led by Dragoneer Investment Group with participation from Brookfield Growth, Accel India, and Tiger Global Management.
Founded in 2017, Facilio offers a platform for commercial, corporate enterprise, health care, and retail properties that leverages AI to analyze data from disparate systems. The company’s suite of applications target maintenance, operational visibility, sustainability, and remote equipment performance monitoring use cases.
“A large gap exists between what property operations teams are tasked with today versus what their currently deployed software tools are capable of,” CEO and cofounder Prabhu Ramachandran told VentureBeat via email. “Most buildings are managed with technology from the ’90s and most enterprise customers have to use multiple systems and services to service their customers or tenants, manage their contractors, collaborate with colleagues, and share reports on progress and roadblocks. There is very little integration or automation … resulting in manual and disjointed processes that, in turn, leads to suboptimal operating margins.”
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For example, using AI-driven predictive maintenance technology, Facilio claims to be able to inform property owners about things like bag filter replacements a few days before they’re due. Facilio’s AI-powered tools can also be used to evaluate trends and recurring equipment defects and route ongoing maintenance activities, the company claims.
“Facilio employs machine-learning algorithms to predictively uncover energy savings, extends the life cycle of expensive equipment, reduces carbon footprint, and improves overall operating efficiency,” Ramachandran added. “Facilio has built machine learning algorithms that learn patterns from past operations’ data from buildings systems to predict equipment failures and performance, energy usage and demand, and create insights to operate buildings efficiently.”
Maintenance-optimizing AI is a burgeoning business, with plenty of competition to go around. There’s BrainBox, 75F, Aquicore, whose algorithms make fine-grained adjustments to HVAC systems on the fly. Augury, a startup developing sensors that attach to machines and record data that’s then analyzed in the cloud, works with service companies to diagnose and optimize systems like industrial HVAC. GE Digital’s Predix and startup Petasense offer similar Wi-Fi-enabled, cloud- and AI-driven monitoring sensors. And Sidewalk Labs and Carbon Relay boast products that leverage sensor data to make predictions about buildings’ cooling usage.
But Ramachandran, who cofounded Facilio with Rajavel Subramanian, Krishnamoorthi Rangasamy, and Yogendra Babu, claims that the company is sufficiently differentiated. He points to an alarm system that lets customers allocate resources based on task priority and a workflow creation tool designed to automate work orders.
“There is a huge potential to apply technologies like internet of things, AI, cloud, and mobility in real estate operations to create value in terms of sustainability, workforce efficiency, and business performance,” Ramachandran said. “Facilio frees up locked-in operational data across multiple building systems, business software, and workflows, into a single pane of glass and makes it useful for multi-stakeholders (from customer service to technicians, contractors to customers).”
Not every real estate company is successfully adopting technologies like Facilio’s, with a 2019 EY survey showing that 58% of organizations struggled to integrate new systems without a major change to IT or business processes. But plenty are. According to Ramachandran, over-120-employee Facilio experienced four times revenue growth over the last year and now has more than 30 enterprise customers across retail, commercial office, health care, banking, and government real estate markets.
Ramachandran says that the proceeds from the series B, which bring Facilio’s total raised to $45 million, will be put toward expanding the startup’s sales and marketing operations.
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