In FY23, in the face of rising interest rates and inflation, property development and investment business Axiom Properties (ASX: AXI) decided to change tact. As companies embraced the artificial intelligence (AI) boom, Axiom got on board, setting its sights on PropTech. Globally, investments in PropTech grew from $23.9 billion in 2018 to $37.7 billion in 2021, and they stay on an upward trajectory.
In keeping with that, Axiom has invested $1.5 million into PropTech company Realty Assist Australia (RAA). RAA is a rapidly growing property tech company that provides invoicing, payment, and cashflow solutions in the Australian real estate sector.
Axiom is investing $1.5 million through a convertible note. After six months, this note can either be repaid or turned into company ownership (equity). This marks Axiom’s third investment in property technology companies and fits with its plan to create a strong, actively managed portfolio of property technology businesses.
Axiom’s newly appointed CEO, PropTech division, Rob Towey said, “Having worked with Realty Assist for a number of months and seen firsthand the results they are delivering for their customers, we’re incredibly excited to support the business during its next phase of growth. Sam and the team have done an amazing job winning significant market share in a short space of time and are well positioned to capitalise on that significant client base with a range of new products and solutions in the coming months.”
Realty Assist has been on a growth journey since its establishment in 2021, with FY23 being a particularly good year for its expansion. This expansion includes increased adoption by real estate agents, a higher number of invoices processed, more deal origination, and greater revenue generation. Consequently, Realty Assist has now become a renowned platform for handling invoices in the Australian real estate market.
This growth is primarily attributed to Realty Assist’s strong agency and agent network. With an extensive user base exceeding 11,000 agents, Realty Assist is well-positioned to introduce additional products, such as Settlement Collect, which, Axiom expects, will bring about a significant increase in both revenue and profitability.
Axiom’s Managing Director, Ben Laurance, added, “We are delighted to have the opportunity to invest in such an exciting business and share in the growth of the Company as it continues on its journey towards being the premier provider of invoicing and cashflow solutions to the Real Estate industry. We look forward to helping and supporting Managing Director Sam Rettke and his team as they execute on their vision.”
Just last month, Axiom appointed Rob Towey as head of its PropTech investments division Axiom Investment Holdings. In FY23, its revenue was down 97% on FY22, going from $65.6 million to just $2.1 million, with net loss up by 162% to $3.4 million. Its cash burn was dominated by project developments, thus prompting its refocus on investments. Following a review of its financials, the Company decided that it’s time to prioritise the booming PropTech space.
In October 2022, the Company invested $4 million in Aussie PropTech company PointData, which uses artificial intelligence (AI) to provide new insights about residential property. The business provides automated market property and land valuations. Axiom owns 22% of PointData, with the ability to own up to 35%. Plus, in June 2023, Axiom acquired a 19.99% stake in property transaction and negotiation platform Openn at a cost of $0.726 million.
In FY24, to address its cash burn, the Company will look to more strategic PropTech investments and stay on the AI growth bandwagon.
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