A few years ago, we carried out an interview with Tzvete Doncheva, who has become one of the most prominent PropTech faces in recent years, with an active LinkedIn page and roles as a Board Trustee at Girls in Charge (a not-for profit international social enterprise) and adviser to The Entrepreneurs Network.
This is alongside her day-to-day role as International Investor Relations Lead at venture capital platform PropTech1.
Here, we catch up with her again to discuss PropTech in the UK, women in property and whether the UK is entrepreneurial enough.
1. It's been a few years since our last Q&A - what's changed for you since then?
Our last Q&A was before March 2020 - so speaking nearly from a world apart :)
Certain things have stayed the same - I still work in PropTech, and still in venture capital. But it’s a different firm, and in a role covering investor relations (fundraising). Just like founders, VCs need to raise capital too.
My level of understanding of the PropTech/VC and now even LP landscape changed. With more experience comes more depth. Thanks to being actively involved in PropTech1’s new market expansion to North Europe (example here), the scope of my perspective changed. My views turned global - and I got to experience and get to know ecosystems I didn’t necessarily have too much knowledge of previously. The absolute biggest change however is within. I got to re-discover my confidence at work. It might have not been visible when we last spoke, but the area of self-confidence was something I definitely struggled with before.
Probably it was partly because I was new, partly because I so starkly differed from the norm, in part perhaps because of leadership at the time. Fast forward to now, despite still learning every day, I’m just a lot more comfortable taking up responsibility, filling a role and in many instances - outgrowing in. It’s been very beneficial to have been able to work closely with PT1’s Managing Partner, Nikolas Samios, who definitely helped to accelerate my approach to be very solutions-driven/oriented. (i.e. what are we doing as a result of x,y,z rather than just stating facts). This type of effective leadership promotes an entrepreneurial rather than an employee-style mentality. So in short, I grew up. Likely in ways not necessarily obvious at first sight.
How does PropTech differ in the UK and elsewhere in Europe? Or is there a lot of synergy and crossover?
Great question - and valuable intel for the Property Investor Today UK readers.
Some PropTech subcategories (fintech, insurtech) are more developed in the UK, compared to much of the continent. If we look at the specifics in other regions, North Europe typically brings forward a heavy share of the ESG-focused startups. Smaller countries, with a smaller addressable market often offer a much more localised solution base. There, solutions almost necessarily need to expand beyond their region to go global.
Nevertheless, building in those types of markets has advantages - given the size, the initial test/sounding, finding a PMF and potentially getting to a stage of early traction could happen a lot quicker and utilising fewer resources. This is the case in my home state Bulgaria - where given the market size, the networks founders need to tap into are also less (and decision-making time tends to be faster). Getting beyond one gatekeeper could really help in building conviction with many other similar stakeholders. Hence why a lot of founders actually, even from abroad, choose to come to Bulgaria to early stage test their solutions.
Nevertheless for those companies who have obviously started local, or aim to expand in countries well beyond their regions and networks, having a supportive partner, who can help in this expansion is obviously something very beneficial, and is what PropTech1 has done more than once with the portfolio. Thanks to our European-wide network and connections in the real estate ecosystem on the continent, we can and have helped our companies with local connections on the ground on multiple occasions, to facilitate this market expansion.
As a rule of thumb (and perhaps following basic logic principles), the larger the domestic market size is, the more difficult it is to break in (accessing closed networks, getting to a decision-maker, size of competition).
Taking this in consideration though, what is really positive about the UK PropTech scene is how collaborative the ecosystem is. While it’s not easy, it is possible for a newcomer to break into the sector, build a network and succeed (again it requires a certain level of determination and grit) - but those types of opportunities and serendipitous moments of interaction do exist. There are numerous associations, organisations, communities (UKGBC, UKPA) promoting the cross industry exchange, and assisting for the boundaries between traditional players and innovators to be broken.
Even us at PropTech1, despite being a financial entity, frequently do our best to act as the bridge between startups and industry, and in a way support players on both sides of the equation to speak the same language (a very recent example of this is the ecosystem gathering PropTech1 put together at our new office hub in London, a ‘PropTech Summer Fest’, in collaboration with one of the entities just mentioned, UK Green Building Council).
This level of openness is definitely not uniform across Europe, and given the size of the UK market is quite unique. Perhaps this feature is also one of the reasons why the UK has seen the largest number of proptech solutions be founded locally (Europe-wide comparison), and why here venture activity - both from VC firms, investing directly in startups, and entities accessing proptech via VC vehicles is at the forefront in the continent.
*Given the international focus of my work over the last year(s), this answer also contains feedback by my colleague Kingma Ma, who’s been heading PT1 UK operations since the company opened offices in the country.
3. Some people claim PropTech has reached its natural ceiling - what do you say to that?
I’d say - can we look at data? We’ve seen that for the first half of 2022, venture capital investment in PropTech companies yet again broke all records. 2020-2021, the share of VC funding going in European PropTech increased by 350%. Real estate continues to be the largest asset class on Earth, and the built world touches upon nearly every area of our daily lives. Structural and economic concerns are making it absolutely necessary for the industry to adopt technology.
A big issue in Europe is of course the state of existing building stock, and hitting goals to reduce carbon emissions (ie a 55% reduction in carbon emissions by 2030). To meet the EU directive’s targets (and do better for the planet!), about 40M buildings in the EU will need to be renovated. Interpreting those signals, it’s very likely that the PropTech opportunity will only expand.
From a financial, as well as a strategic standpoint, some of the ultimate beneficiaries for this shift are of course the (sub) category-leaders in PropTech, the venture firms that have backed them early, and the LPs of these firms, the real estate stakeholders who had access to them before they turned mainstream. Given the number of new firms, new vintages, continuous flow of capital in the sector, we can assume
4. As a high-profile woman in property, have you faced any challenges or barriers to get where you are today?
It’s very sweet to hear this recognition. As much as I appreciate the comment, I consider myself much more aligned and connected to the latter part of the word PropTech. If we have to be even more explicit, the sector in which I work and try to develop in is finance - venture capital. I’m not 100% sure the same barriers to entry and career progression apply. I do however get your point about gender diversity in the real estate sector (especially at senior level). Given PT1’s shareholders come from the industry (property companies/developers/family offices who see the strategic as well as the financial value an investment in a PropTech specific venture fund can provide), I can understand your question if I relate it to the number of times I’ve spoken to a woman who is either an existing or a prospective LP of ours. It’s not been that often. An exception might be the Nordics, where there seems to be a better gender balance (again, those are personal observations only). Very frequently what is missing in this gender discussion is the age factor (is youth perceived as a negative or a positive in building credibility?) and plainly physical attractiveness (which on the credibility point in business settings is still interpreted differently in guys/women). It’s a lot to do with unconscious biases, which are at the end of the day deeply ingrained, and it’ll take more than one young girl raising funds to change that.
However, I do want to focus on a few positives for a change. There really are people who, thanks to their inclusive leadership, make it possible for systemic barriers to be overcome and for male-dominated industries to become more inclusive, and thus diverse. A stark example here in my LP interactions under the PT1 hat has been Curth C Flatow, the Managing Partner at FAP Group, leading real estate debt platform in Germany, who has been super supportive in our ecosystem initiatives or Sadie Malim, Director, Moorfield and Gilda Perez-Alvarado, Global CEO JLL Hotels & Hospitality, who despite their level of seniority are open to connecting and spending time with evidently much more junior professionals. Change is slow, and the more people are involved in this process, the quicker we’d get to a state where those questions won’t have the grounds to be asked.
5. Does more need to be done to encourage women into property and tech, and do boardrooms still need to be more equal?
I’ll relate my answer where I have the most direct experience - tech (+and VC). Before that though, I’d really love to know what we envision this ‘encouragement’ looks like?
For me, it still ultimately boils down to you gotta see it to believe it (or be it). The share of women in the construction industry is barely at 10% and as we’ve discussed many times before, a lot of those construction/property tech plays do come from people who have a domain expertise in the area they’re trying to innovate in. In real estate it’s at about 15%. Hence why it isn’t exactly surprising there are few women building proptech businesses (about 5-15% of the total founder share). It’s quite interesting that in those very heavily male-dominated industries such as construction, women make nearly 100% of what guys make.
So it isn’t as black and white as the industry not offering opportunities for growth. But is it considered ‘sexy’ for women to work in? That, I don’t know. What I do know is that I didn’t consider a career in either the construction industry or property when I was at school. Neither tech for that matter.
We need to tackle the problem from its root, perhaps going all the way to family/school level and the societal perceptions of how a job or an industry is perceived. We go back to the ultimate statement - you gotta see it to believe it, and be it. Having more relatable role models in places that matter not only acts as inspiration but a form of encouragement to the younger generation, as they’re making up their minds on where to allocate their time/energy so that they can make a difference in society.
6. How important is sustainability when it comes to PropTech?
I can perhaps break this question via the prism of the day-to-day conversations I’ve been having - which are with groups or individuals making up the LP community, investing in PropTech (venture). It’s frequent to receive questions around the share of sustainability-focused deals our team is seeing or the considerations we’re taking as a fund to implement ESG strategies (our Fund 1 is SFDR Art. 8 compliant and we are also a UN-PRI signatory).
We do see sustainability being one of the key drives/accelerators, fueling the adoption of PropTech in the real estate industry and are very happy to have made bets in this domain (i.e. our portfolio company ecoworks, a multiple-award winning net-zero modernisation provider that is able to cut the renovation time of a building from months to days). Our whitepaper on PropTech/ESG is linked here.
Given our investment scope is a bit broader however, we’d also be equally happy to take a closer look at an opportunistic deal, with the plain VC-style characteristics of being a fund returner.
7. You are a prolific user of LinkedIn - would you advise someone just starting out to use the platform to grow their connections and build their name?
It's a bit dangerous to give generic advice - but as a general rule - a tool is as good as your use of it. :) Perhaps an important question for someone just starting out is the why - why they are using x, y, z tools? Linkedin can be a good starting point to help one build a larger network ..but only when used right.
I shrug a little bit whenever I get a Linkedin request from someone I don’t know, have never met without any background note on why they’re trying to connect with me. Poor targeting such as founders pitching me fashion tech startups - when I’m neither on the deal side, nor does the fund I work at focus on retail/fashion tech, also doesn’t leave a good impression. Research pays off - so does a strategic approach (ie do you actually have a good reason to connect with your ‘target’ person?).
Being active on Linkedin and adding people just for the sake of growing the number of connections is counterproductive, and I wouldn’t necessarily advise anyone who’s trying to build a trustworthy name in an industry to do that.
On this note, and on brand building, unfortunately I’m no expert, but there are people out there who are. Apparently it is definitely possible to utilise Linkedin to gain a substantial amount of brand recognition that can translate into better hiring options, sales, even for some founders more investor interest. Check out my friend Amelia Sordell, with whom we met as judges for the Startups Magazine ‘Hustle Awards’, and her great tips on personal brand building (random post selection of hers linked here).
8. What's your top PropTech prediction for the rest of this year and the next five years?
Again, building up on the intel from LP conversations, and how some of the largest real estate firms engage with PropTech :). Mind my bias, but I do think we’d see a ‘scaling curve’ in how those stakeholders go about approaching the proptech landscape. Some of the more forward thinking ones have already started partnering up with specialised VC managers, as a way to get a more structured, strategic access to PropTech innovations.
More will embark on this journey as the information on what being an LP at those vehicles entails becomes mainstream (from strategic dealflow opportunities, to co-investment opportunities in pre-screened/filtered venture-backed deals - depending on the firm one is to partner up with). The trend we are noticing now of the need to bridge the gap between property and tech will accelerate. As one great quote goes:
'Real estate is not the calm stroll it used to be - now it’s a sprint, and whoever lags behind loses’ (source: Forbes).
9. Is the UK property market entrepreneurial enough, or does it need to do more?
What is meant by ‘entrepreneurial enough’?
If we look at the data, the UK market is entrepreneurial - nearly 100% of businesses in the country are considered small (employing <50 people), with about 670K new ventures being launched each year. In regards to the property market - being entrepreneurial can be a mindset. It doesn’t necessarily mean starting a new business - but it can mean being open to adopting / implementing new ideas and projects that are improving the core business.
Established companies can also be entrepreneurial - it depends on the people who run them! Indeed, some of these people at a point in their careers might end up founding proptech ventures (the profile of a former RE exec or person with significant domain RE experience is a common one in proptech startup founding teams).
If we judge on numbers, the UK is likely the most entrepreneurial property market in Europe - with the single largest individual PropTech share in Europe (over one third of PropTech companies in Europe originate from the UK).