Four months’ training, an initial investment of 115,000 euro for each start-up, an intense coaching path undertaken by the managers of some of the sector’s most important companies: the first cycle of HabiSmart, the acceleration programme of the National Network of Cassa Depositi e Prestiti, Italy’s state-controlled investment bank, which is dedicated to proptechs and sustainable building programmes, is about to come to an end. Ninety four applications were received, 38% from abroad, and out of these nine were selected: those are the numbers of the initiative managed from an operating standpoint by Digital Magics and Mass Challenge  and of which ARECneprix and abilio, two companies of the illimity Group, are among the leading corporate partners. The right starting point for launching oneself into the future in a sector which has to deal with the climate and energy crises and digital transition; but which, precisely for this reason, enjoys ample room for growth.

An ecosystem of 273 businesses

“The latest edition of Proptech Monitor, the annual report of Milan Polytechnic, of which we are the main partner, confirms the market potential of technology applied to real estate”, explained Daniele Levi Formiggini, Head of Real Estate Services in ARECneprix. “The digital revolution is transforming the real estate sector and this phenomenon is also part of our DNA, due to the data-led approach that we have always pursued”.

The Milan education institute’s report mapped 273 start-up proptechs across Italy at the end of 2022, of which one out of two (48%) set up in the past five years. Six out of ten (63%) are based in the north of the country, especially in Milan, and 80% have fewer than twenty employees: “The numbers have been constantly rising over the past four years”, noted Formiggini, “but the growth potential is still enormous if we consider that there are over four thousand proptechs in Europe, with a thousand in the United Kingdom alone. According to the manager, the key is to be found in the creation of a pervasive ecosystem. “You have to help start-ups work as a team by fostering their interaction with the world of academic research, as well as with venture capital companies and the sector’s most consolidated entities. What is more, I can state from my own experience that the synergies between entities that may appear distant from one another can trigger virtuous dynamics of innovation and knowledge transfer from which all stakeholders can benefit”.

This is precisely the aim of HabiSmart, which has programmes taking it as far as 2025. “At the end of the three planned cycles we have produced a mapping of Italy’s best businesses in the sector, but have also created the conditions for, on the one hand, bringing back home the start-ups that have gone abroad in search of more mature markets, and on the other for being more appealing to the international start-ups”, stated Riccardo Ruscalla, Partner of Digital Magics and the programme’s director.

There is no overriding sector in Italy’s proptech world: the Polytechnic’s census shows a somewhat homogeneous distribution of businesses, which range from professional services (28%) to real estate fintechs (26%), smart real estate-asset management companies (18%) and the sharing economy (18%). The innovation is in the contechs, meaning how to modernise the building and construction sector, and 10% of the start-ups are dedicated to this.

The route being followed by businesses

The nine companies selected in 2022 underwent a four-month journey, during which their founders were required to attend lessons in presence for an average of one day a week. “The method we propose has been widely tested”, stated Ruscalla, “and has provided excellent results”. A broad spectrum of lectures, in which financial, fiscal, legal and governance issues are tackled, alternates with one-to-one meetings with mentors to focus on business models, refine market proposals and construct pilot projects with the corporate partners. With the added value of entering a network of valuable relationships.

A variety of backgrounds, experiences and minds crossing each other’s paths in one of the country’s most modern urban surroundings, Porta Nuova in Milan.

“Everyone’s strength is their passion for innovation, creativity and the ability to adapt to change”, Formiggini stressed. “Otherwise, they all bring something of their own: in young people curiosity and the desire to do things prevail, while those with more experience have knowledge about the specific market, consolidated skills and perseverance, a great deal of perseverance. What remains to be done, and this is my hope for the future, is to close the technological gap with foreign competition”, the manager concluded. Compared to international proptech start-ups, the business and commercial element dominates the technological and research component”. But innovation cannot ignore the need for a strong scientific ingredient too. HabiSmart, how to participate in 2023 cycle

The new HabiSmart cycle will begin in a few months’ time. Innovation and originality of ideas and approach, the team’s skills (which must be heterogeneous and complementary), the potential and size of the specific market and the ability to present the product or service will all be assessed during the selection process. The accelerator will acquire a participation of up to 10% in the start-up’s share capital against the initial investment, with an observer attending board of directors’ meetings. Following the initial 115 thousand euro there is the possibility that a further three hundred thousand euro will be added to the first investment. The call is addressed to a large audience. National start-ups, international start-ups with Italian founders who want set up in the country and foreign start-ups intending to enter the Italian market can all sign up.