To tackle the energy price crisis, European Union countries, including Lithuania, have pledged to cut their gas consumption by 15%. One way to achieve this is to invest in companies in the proptech (property technology) sector that bring innovations into the real estate (RE) market. Experts talk about how the promotion of the proptech segment can increase Lithuania’s energy independence and reduce the population’s bills.
Martinas Brazauskas, head of the association Proptech Lithuania, which unites proptech companies, says that the concept of proptech covers a wide range of changes in the RE market.
“Although this area in Lithuania is growing lightning-fast and is extremely new, proptech can bring much-needed changes to the Lithuanian living and working environment. This covers areas such as digitalisation and efficiency of the construction process, more sustainable ways of extracting materials, using big data in the RE sector, modern innovations in our homes, offices, and other buildings. It can be said that proptech aims to rethink the vast majority of the RE market processes, which are also closely related to other industries,” says Mr Brazauskas.
He continues that if other industries have transformed several times over the past decades, the RE market seems to be stuck in the last century.
“This sector is full of big players who for years have not need to change. However, with new, energetic players, full of well-aimed ideas, coming into the market, change is inevitable. We can already see this in Lithuania. For example, various investment platforms for RE projects are being developed, enabling smaller developers to develop projects, and giving people a chance to earn by investing, as well as companies engaged in local data analytics, and new business models, such as rent-to-buy. There are, indeed, many opportunities in the energy field, but such solutions are still lacking in our country. So far, the strongest are start-ups developing building management and optimisation systems,” says the expert.
Significantly reduces energy demand and bills
According to Kęstutis Sasnauskas, CEO of the Swedish capital investment firm Eastnine, the proptech sector has a huge potential for saving heat and electricity, which can not only cut the bills of the population, but also increase the country’s energy independence.
“The building sector accounts for 40% of the total energy consumption in the EU, according to the data of the European Union. Modernisation and digitalisation of this segment can help reduce energy consumption, thus increasing the resilience of both individual people and the state to surges in energy prices,” notes Mr Sasnauskas.
According to him, various proptech innovations make it possible to maintain energy consumption in both the construction and operation of buildings, as well as reduce energy waste.
“For example, Internet of Things (IoT)-based office and home management technologies can save energy by automatically adjusting lighting, heating, water temperature, and ventilation depending on the need for these services at a given time. Such a solution already makes it possible to reduce energy demand and bills by nearly a quarter,” says the CEO of Eastnine.
We need to speak more loudly about the importance of proptech
Mr Brazauskas adds that proptech aims not only to ensure that buildings become passive from an environmental point of view and use less energy resources, but also to produce it themselves.
“It is likely that in the future we will live in cities where buildings generate more energy than they consume. This would not only address climate change but also eliminate additional energy demand. The road to such a tomorrow leads through the proptech industry and the technologies it develops, such as installing fully transparent solar panels instead of glass window panes, smart control of street and building lighting, space heating, and refrigeration. Therefore, we need to start taking an active interest in innovation in the RE sector, develop the proptech ecosystem, and help start-up developers enter this field,” says the head of the association Proptech Lithuania.
Proptech Innovation Programme launches in Lithuania
To discover, support, and fund start-ups that would help innovate the Lithuanian RE industry, the Lithuanian Proptech Innovation Programme will launch in November of this year. In its first phase, the Proptech Bootcamp incubator is planned to take place at the FinTech and Sustainable Innovation Centre ROCKIT.
“Seeing the potential of proptech to solve diverse micro and macro problems in Lithuania, we understand how important it is to provide a platform for the exchange of knowledge, experience, and ideas in order to develop the proptech sector and catalyse the RE market. In the Proptech Bootcamp incubator, our aim will be to help proptech innovators expand their team, get expert insights from market players and investors, and establish useful contacts with local and international professionals in the sector,” says Lina Žemaitytė-Kirkman, Head of ROCKIT.
The Lithuanian Proptech Innovation Programme is organised by Eastnine, ROCKIT, and BalticSandbox. Registration for the incubator will begin in the second half of September.