There’s no doubt that the South African property sector, like most industries, is currently facing some challenges. One major bank saw credit impairments rise 57% in the first half of 2023 – a result of the impact of higher interest rates, higher levels of inflation and record levels of load-shedding. Another bank said its total net credit impairment charges on gross loans and advances grew by 80% to R6.4 billion over the financial year ending February 2023.
But Group CEO of fintech company e4, Grant Phillips, says it shouldn’t be a long-term concern. “The market is currently depressed due to higher interest rates and the increased cost of living, but the property sector is cyclical, as we’ve learned in over 20 years in business as a proptech expert. We expect the market to be a bit slower for around 18 months before it turns again. Yes, buyers, lenders and all role-players are feeling the pressure, but now is the ideal time to take advantage of the downturn to optimise processes and get ready for the next upturn.”
Getting on board with proptech – any technology that helps individuals or companies buy, sell and manage property – is one way of doing exactly that. Some local experts believe that embracing proptech could be the sector’s saving grace, and international appetite is also growing exponentially. The 2022 Proptech Annual Barometer shows that investment in the proptech sector is “remarkably high”. And it’s easy to see why: the 2020 iteration of the Barometer found that 80% of companies utilising proptech saw a positive impact on operations and services, with 70% benefiting from an increase in decision-making and finances.
This has certainly been the experience for e4 and its partners. Originally created over 20 years ago to link lenders with attorneys and conveyancers in the home buying process, e4’s focus remains on proptech, though it has since added myriad solutions and products to its portfolio. Phillips explains: “We provide a digital ecosystem for the home buying process where all stakeholders can communicate digitally to facilitate the transaction, from the lender and buyer to the conveyancer, rates council and deeds office. In a nutshell, our role is to decrease the amount of time it takes from the offer to purchase until the buyer moves in. We shorten that lead time by automating and optimising processes to remove any friction, such as using advanced analytics to verify data – traditionally a time-consuming, labour-intensive manual process. We spend a lot of time in clients’ environments to understand their frustrations and customise our offering to their needs.”
By repurposing its early-stage technology, e4 has also developed solutions that address the needs of various sectors. As a result, e4 has become a central figure in numerous transactional ecosystems. It’s also expanded internationally, partnering with the second biggest lender in the UK to build a similar digital ecosystem for the home buying process.
Most recently, the company announced its acquisition by a consortium of investors led by independent private equity fund manager Infinite Partners. The transaction is valued in excess of R1 billion.
Phillips says the company's acquisition, revenue diversification and geographic expansion are clear indicators that proptech is on an upward curve, despite numerous challenges in the property industry. Now is the time to get on board, he says. “Those who embrace proptech as a core part of their business model will be able to achieve greater efficiency, profitability and customer satisfaction. Use this slower time wisely to prepare and give yourself a competitive advantage when the market turns again.”
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e4
e4 is a technology company specialising in digitalisation. By understanding the complexity of a digital journey, e4 partners with its clients to provide innovative solutions that suits their unique needs. Using an omni-channel platform approach, e4 offers a range of digitally-inspired services as well as solutions.
Working across financial services, data and the legal sector, e4 understands the intricate requirements in these sectors, and uses its expertise to assist clients in effectively managing their businesses through digitalisation.