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5Q PropTech Interview – Josef Fuss Partner at TaylorWessing

December 26, 2019

1. Could you describe briefly who you are and where you set yourself in the PropTech Industry?

I am Partner in the Corporate Technology team at Taylor Wessing, a leading international law firm, where I advise tech companies and tech investors on Venture Capital transactions and M&A.

As a firm, we’re in the enviable position of being market leaders in Technology, Venture Capital and Real Estate. It has allowed us to play a crucial role in the PropTech arena from the very start.  

We advise companies from across the spectrum of the PropTech ecosystem. This includes marketplaces, property management, co-working and co-living, insurance, construction and financing as well as VCs, strategic investors and accelerators in PropTech.

We’re very excited about this sector for several reasons, including, of course, the size of the opportunity.

While real estate is the largest asset class in the world, it remains one the last to adopt technology with Excel continuing to be one of the most commonly used tools for data management.

2. What key advice would you give to PropTech entrepreneurs seeking to scale their business in Europe through late-stage funding?

There are so many endemic and fundamental pain points for stakeholders in the real estate ecosystem that are focusing and solving just one of them means you’ll be on to a winner.

Also, at a time where access to capital is less of a challenge, picking the right financing partner becomes even more important.

While this space traditionally was of less interest to VC funds, over the last few years, we have seen a rapid increase in venture capital investors moving into the sector.

Depending on their product, PropTech entrepreneurs should also consider strategic investors.  In addition to somewhat more patient capital, it will also provide for more direct access to what still remains a very old school market.

3. Do you think there is an opportunity for Legal PropTech companies to thrive?

Absolutely! Who doesn’t want to save on legal fees and the time and hassle involved in say conveyancing?

LegalTech has been disrupting the way the legal industry works for several years now and has dramatically transformed the myriad of daily tasks us lawyers undertake in different fields.

This includes including reviewing and approving documents, analysing massive data sets as part of a due diligence process or monitoring assets.

As you may know, there are many manual and semi-manual processes involved Real Estate law which is ripe for disruption.

As a lawyer in a technology-focused firm, I can tell you that I welcome any development that reduces the time I have to spend on non-core tasks.

I am also thrilled to share the benefits of that efficiency drive with my clients in the form of lower fees, greater flexibility and transparency.

The upside for me is, of course, that it allows me to charge a premium for my core advisory work.

4. What are your thoughts on a blockchain-based registration system, and how will this improve the legal aspect of property?

The benefits of blockchain in terms of secure asset tracking are clear and have the potential to increase liquidity, mitigate risk and reduce costs, all of which would make property transactions an even more attractive prospect.

Take our registration system for instance, although the registration documents can be submitted to the Land Registry via an online portal, registration itself is not automated. Instead, it’s carried out by a team of people at the relevant Land Registry office.

While the process is an established one, it is not without its challenges, including time delays, fraud and human error.

Coming back to your question on whether a blockchain-based land registration system could address some of these challenges, the answer is: yes (to an extent).

For example, in terms of timing, there would no longer be a registration gap of days or weeks as the changes to the information contained on the distributed ledger are almost instant.

Also, while it is not a fraud-proof system, each transaction on the blockchain is made by a party with a digital signature. It provides proof that the transaction has come from the rightful owner.

If you couple that in the future with blockchain-based customer verification and due diligence processes undertaken by law firms that would add an important layer of security.

5. According to you, which PropTech vertical has the most potential currently and why?

There are so many to choose from: ConTech must be up there. It’s a massive global industry which is mostly dominated by old-fashioned processes.

It shares this accolade with the way real estate transactions are managed. It is another area in which I’m expecting exciting changes ahead.

Finally, we are also seeing a lot of really interesting solutions emerging around digital property management.

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