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Commercial real estate brokerage Newmark Knight Frank participated in the rather large seed round along with RPM Ventures, and the National Association of Realtors, which earlier this year launched its first commercial real estate technology accelerator (dubbed Second Century Ventures).
San Diego-based Biproxi’s target users are commercial real estate brokers, buyers and tenants. It’s not, however, aimed at those conducting transactions around nine-digit or higher-valued properties. Instead, it wants to help a segment of the commercial real estate world that is considered to be “the middle market,” such as independent brokerages that might have less to spend on marketing.
“The platform gives independent agents the resources and reach to compete with larger brokerage houses while maintaining their independence,” according to the company, with the goal of giving them a way to “run a real estate deal from listing to closing” with one platform instead of working with (and paying for) several.
As part of the funding announcement, the startup also said it unveiled today an algorithmic-based data product that provides “instant property and valuation data on over 32 million off market commercial properties.” Biproxi says it gives users access to detailed information such as property data, historical sales data, assessed property values and financing history.
The company had previously launched a free product that offered biproximateTM, which provided “biproximate” (not perfect) values on more than 10 million commercial properties across the United States. That product also contained information on each property, including sales and financing history.
The offering of such data for free is unique in the CRE industry, according to CEO Gordon Smith, who said that historically, accessing transaction history or the current market value of a commercial real estate property has required “an expensive data subscription.”
“With Biproxi, we’re trying to take four or five tools the CRE industry uses and put it all onto one platform,” he told Crunchbase News. “In the United States, there are $600 billion in investment sales a year, and 75 percent of that volume is under $25 million. There’s a lot of opportunity there.”
Biproxi also claims to do other things for a lower cost than traditional companies and other startups might. For example, Smith said it can conduct an appraisal within three to seven days for about $2400 whereas in the “traditional appraisal world,” it can cost closer to $5,000 to $7,000 and take three to four weeks.
Smith co-founded the company along with Yan Khamish, Thatcher Milholland and Carrington Guy, in early 2018, one year after leaving now competitor Ten-X, a commercial real estate exchange that he first became involved with when working at private equity firm Fortress Investment Group. All co-founders have experience working in the CRE industry, a fact that led the startup to purposely not seek strategic investments from industry-focused VCs.
“We didn’t seek a proptech investment base because our team has been in the business for a long time, and we really didn’t need that kind of expertise,” he said. “We knew that a lead investor like Greycroft could really help build a business.”
Stewart Easterby, operating partner at Greycroft, said his firm recognizes that the CRE industry is a “large market.”
“We believe Biproxi has created a more efficient way for brokers and investors to do business,” he wrote via email. “Biproxi has created an end-to-end solution for commercial agents to complete an entire real estate deal on one free platform. We’ve never seen all of these features packaged into one toolset.”
The company will ultimately have three intended primary revenue streams, including charging buyers a transaction fee. Most brokers “are happy to rebate” such fees, according to Smith, because most are already getting “both sides of the commission” on deals conducted on its platform. Down the line, it also plans to offer financing on deals (it’s already partnered with a title company) and charge for some of its data products.
Currently, Biproxi has 100,000 listings on its site and Smith hopes to double that number by month’s end. It also has roughly 4,000 registered users and about 15 employees, a number the company expects to grow to about 50 by year’s end by bringing a currently-outsourced technology team “in house.”
Illustration: Li-Anne Dias