Lease Abstraction and CRE Data Firm Prophia Targets Institutional Investors
As CRE becomes more important to institutional investors, the need to pull data from leases for analysis grows.
Proptech company Prophia announced that it had raised $10.2 million in Series-A fundraising. Cercano Management led the round. Also participating were SignalFire and several customers. Prophia had previously raised $5.1 million since its first seed round in 2018. The firm didn’t announce what it planned to use the funds for.
“The company has also reported 250% ARR growth in 2022, as it supports customers growing data sets across 160 million square feet of assets under management,” according to its press release. There’s no indication of what annual recurring revenue was before the growth, so it is impossible to know the significance of the net figure.
“Dedicated to eliminating manually intensive lease abstractions and data accessibility processes, Prophia allows industry leaders to enhance their investment strategy with comprehensive, verifiable, and structured commercial portfolio data,” the release said.
The company’s focus is on institutional investors for the reason that their needs in investment management can be different from other types of investors. Institutions have been increasing their CRE investment allotment according to an ongoing series of surveys. This year, the survey included 173 global investors with a combined portfolio asset value of $11 trillion, and that is hardly inclusive of all institutional investors.
Institutions manage across portfolios of assets and want data to help provide insight to the process. Abstracting data from leases by hand is a tedious and time-consuming task. Prophia claims to help through a technology-enabled process.
First, an institution will upload its leases into the company’s cloud platform. Prophia’s software uses machine learning and human review to largely automate the extraction. “Our subject matter experts identify missing information and coordinate with your teams through reconciliation,” its website says, suggesting that the humans perform ongoing training of the AI systems more thoroughly recognize and extract important data. Ultimately, that increases the speed and decreases the cost of the extraction process.
Once the data is available, the investor can share its information with an unlimited number of “internal and external stakeholders.” Once data is in the cloud system, an investor can upload additional “notices, amendments, and agreements” so the information continues to be recent and accurate.
“Commercial real estate is one of the world’s largest asset classes, but investors and operators are unfortunately stuck with untrusted and incomplete data with antiquated tools,” the release quoted Prophia CEO Cameron Steele as saying. “By focusing on providing our customers with trusted, comprehensive, and structured building data, Prophia is addressing a severe and persistent pain point in the industry.”