“Real Estate surrounds us all, it’s also the most polluting asset class in the world.” In conversation with Gregory Dewerpe, A/O Proptech

Huckletree's Editorial TeamThe Editorial TeamHuckletree5/18/2021

Gregory Dewerpe, A/O Proptech's founder, could well be a Renaissance man, such is the ease with which he moves between technical and philosophical topics, with every thought strung together seamlessly, much like an alfresco Davincian stroll.

We sat down with Gregory just ahead of his fireside chat at Earthrise Summit to dive deep into some pretty existential matters, and we don’t necessarily mean that metaphorically.

Gregory, you have said in the past that one great motivator for you is wanting to make an impact, getting the most out of the time we have on this Earth. Why have you chosen RE as a preferred area on which to leave your mark?

A large portion of our lives is spent in a professional capacity. 

I have always held the conviction that my career path must eventually enable me to achieve my professional ambitions as much as my more philosophical ones and provide me with a platform for positive change.

Real estate technology is a means to an end for me; it’s where I found the opportunity to express this multi-layered ambition of mine. And the reason is clear:

Real estate is the largest class in the world; it’s over half of the world’s assets. Real Estate surrounds us all; it’s where you live (housing is the single largest expenditure in people budgets), where you work, where you play, where you learn. It’s everything around you. It’s the built environment.

It’s also an industry where technology penetration is marginal. More importantly, it’s also the most polluting asset class in the world (40% of global greenhouse gas emission,  30% of global raw material consumption).

This unique combination of size, a technological lag, and overall inefficiencies make the transformation of this mammoth industry a generational opportunity for investors, technologists, environmentalists and landlords.

I genuinely believe it can be one of the most powerful and influential platforms to ignite change and make a positive impact, much beyond the industry itself.

Imagine a world where you can build better, greener, faster and cheaper thanks to technology and science. Right there, you solve the housing shortage and affordability tensions and address the huge global issue of climate change. Imagine a world where landlords leverage data to service their tenants smartly and offer them a frictionless experience, healthy living and buildings, flexibility, and transparency. 

That’s what real estate technology is about for me. The entire lifecycle of an asset (office, home, apartment, hotels, logistics etc.) can be improved, end to end: from the material supply chain to the design and architecture, the construction, the operations and the transactions. It’s a lot of innovation to unpack! 

We are in the early innings of a massive innovation wave (an unstoppable one). Because innovation promotes more innovation in a world of distributed knowledge and access, it’s never been a greater time to be an entrepreneur, and things will accelerate exponentially. 

I am not running a non-profit fund by any means, but I think nowadays, profit and purpose need to go hand in hand. We must all try our hardest to do well by doing good, regardless of our industry. With proptech, we can do exactly that.

Architecture, in broad terms, has often been described as a material language. What should define the spaces of the future, and what messages should we embed in our living and working environments?  

Architecture is much more than materials; it’s defining the space, the dynamics and the energy that surrounds us 24/7. It’s one of the most critical aspects of our well-being, our climate, friendliness and our safety as a society. 

Building buildings that promote healthy, sustainable and positive living is going to be one of the most critical missions of our generation. For starters, leveraging design to build better, faster and cheaper helps solve a lot of the affordability and accessibility issues that currently contribute to the housing crisis that we are facing.

Designing buildings to promote healthy and positive living and privileging bio-diversity, and being more in sync with the surrounding natural habitat is essential. Not only do we need to be more respectful of our surroundings when building,  but we also need to build assets that can withstand the effects of extreme weather.

We are in the early innings of this, and I strongly believe that with the suitable investment in science and technology, architecture will play a defining role in the future of our built world.

How do you resist the temptation of the "beaten path"? In other words, how do you nurture that underdog vision that has made you who you are, and what fuels your entrepreneurial drive and passion for what you do?

I love being an underdog; that is where I find the motivation to challenge myself, to surprise others and hopefully offer some inspiration to the people who have been made to believe they are not good enough or can’t achieve what they want.

Early on in my life, I faced life-defining challenges, having to fight a rare long-term illness and then, later on, suffering tremendously from the devastating effects of bullying as a young boy. 

However hard the journey has been, it was a blessing in disguise because it taught me to be resilient, grow a thick skin, and find motivation in adversity by always focusing on the positive side of life. It’s not always easy or straight forward but that’s what makes life exciting and so rewarding, in my opinion. More than 30 years later, it still fuels me every day. 

I didn’t get through all of this to just get by in life. It would be unfair to my younger self or my parents, who fought and sacrificed so much to fight for me early on in life. So that’s my fuel, my motivation and my inspiration. 

Despite being the largest proptech VC in Europe, even today, A/O PropTech can be viewed as the underdog. I came as an outsider in the venture capital industry, raising the eyebrows of doubters and people who expect you to fail. The jury is still out there for us, we are only at the beginning of our journey and we have this extra motivation to prove ourselves and prove the doubters wrong. I think it makes us extra hungry, extra motivated and aligns us with our portfolio companies even more.

You are very committed to fighting bullying, not to oversimplify; still, one could argue that, from a purely behavioural perspective, our attitude towards the planet is a form of bullying or abuse? Would you agree? How can we best promote change? How can the built environment (and space more generally), our attitude towards it, and the tools we employ to develop and shape it make a difference and enable tangible action towards a more sustainable future?

I would not compare this to bullying. It would undermine how terrible bullying is and probably overcomplicate the climate change issue.

Climate change is first and foremost an education issue; people simply don’t really understand what climate change means, and when they do, they don’t always comprehend it in tangible ways and therefore tackle it efficiently. 

We have a tendency to focus on the wrong problems which, in the end, have a limited impact in the context of global climate change. Consequently, we end up missing out on the elephant in the room.

Real estate is a perfect example. If you read the news, people talk about aviation or agriculture as the mega culprits for climate change. In fact, real estate is much more harmful than all of those combined and more, yet until recently, it was not a focus point in the fight against climate change. 

Real Estate is 40% of GHG emissions. Imagine if you enhance it by 25%, you wipe out 10% of global emissions. That in itself will be much more impactful than any other measure in other industries. I am not suggesting that we shouldn’t focus on the other issues as well, but we have to make sure we allocate capital, time and resources to the most impactful problems as time is running out and we need to show progress fast. 

As mentioned, every aspect of a building is contributing to climate change: 

  • the materials used to build and their supply chain
  • its design and architecture 
  • the construction process 
  • the operations

All of these stages within the building lifecycle are now seeing the brightest entrepreneurs develop amazing technologies which will enable drastic reduction of carbon footprint on assets, with the goal of this eventually reaching zero. So that’s where we try to spend a lot of our time as a firm because it’s possibly the biggest opportunity of our lifetime. 

How can we encourage the Real Estate industry to engage with Tech and how essential is this in reaching decarbonisation goals?

Education, capital and adoption are essential. Equally, regulators, investors and customers are pressuring the industry to change, so it leaves them no choice in my opinion. There is no way out from this movement. Real estate companies are being faced with three choices: 

  1. Do nothing and get ready to become obsolete within the next decades.
  2. Do the bare minimum to satisfy regulators, investors and customers and get by.
  3. Embrace the opportunity to lead the way and drive fundamental change by not only adopting technology but by investing into technology and science, learning to fail forward and adapt their culture, strategy and talent to become the leader in a followers industry. 

I am very hopeful that we will see change in the next decade, not because we have to but because we want to. I hope that we come to accept the responsibility upon us and put profit and purpose on equal footing.

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