The movement to promote the utilization of IT in the fields of legacy has been increasing in a couple of years. Real estate is one of the fields where various players are acting to try to assimilate with technology.
The movement of the Japanese Ministry of Land, Infrastructure, Transport and Tourism is one of the backgrounds which is activating the players’ activities. The ministry has established an investigation committee to enable non face-to-face explanation of important matters, which had to be done face to face so far, by using the Internet and other tools. The committee had been held repeatedly in 2014.
The Japan Association of New Economy, led by founders of Japanese internet businesses including Rakuten and CyberAgent Ventures, also has been making some actions such as makin proposals in the committee. As a result, social experiments focusing on the ban of online real estate transactions have been started since this August.
A movement is also following among startups as if corresponding these movements. Ietty, the Japanese startup behind an online real estate platform under the same names, has now secured a total of 200 million yen (approximately $1.6 million) from Investors Cloud (cloud service provider for apartment investors), Sansei Capital (the investment arm of Mitsui Life Insurance), Dentsu Digital Holdings, Mizuho Capital, and Mitsui Sumitomo Insurance Venture Capital.
A business synergy by cooperation with each subscriber is also expected. Since real estate is often related with insurance and finance, there is a potential of cooperation with Mitsui Life Insurance, Mitsui Sumitomo Insurance, and Mizuho Bank. Investors Cloud has a business synergy as a real estate company which is strong in the Internet, and Dentsu as a company which has knowledge to reach the masses.
Since the beta launch of its platform in June of 2013, Ietty fundraised $500,000 from I Mercury Capital, or the investment arm of Japanese mobile gaming giant Mixi, followed by another $1.9 million funding from YJ Capital (the investment arm of Yahoo Japan), and Incubate Fund. The company started expanding its business range such as providing Ietty Biz , the welfare service for corporations while also setting up a real store in Tokyo.
Ietty initially started as a recommendation service of real estate. Artificial intelligence (AI) has been gradually replace recommendation function though our readers might know. Even in Ietty, about 80% of proposals of properties are performed by the algorithm. When the environment over real estate changes as introduced in the introduction, the replacement of existing works, making network of people who have real-estate and building license and ordering business by cloud sourcing for example, will be possible.
Ietty CEO Taihei Ogawa explained:
As online system of real estate develops, AI replaces salespeople and cloud sourcing is going to be used actively. Then, the cost of operation side decreases and a commission competition will occur.
The real estate world was not facing users so far. Ietty focuses on the attitude of user first thoroughly. The business model is going to be different than what it is now from now on. Nothing will be more important than telling no lies to users for sustainable grow up. We attend to users as a 24-hour real estate agent in smartphones anytime.
If a commission war occurs, Ogawa predicts that some companies among online real estate agent survive and the different shades of services are expected to be made. For Ietty, being ”user first” might be a feature of its service. On the other hand, it will be difficult for real estate agents in town, the business model of labor intensive, to remain if commission fees are lowered. How does ietty ,who has been providing its service by building network with real estate agents in town manage?
In response, Ogawa says,
Certainly, the service which was provided by agents in town thus far is going to be completed online. However, locality might be lost with that kind of service-providing. No one can beat local real estate agents at the information such as what the town is like and what kinds of stores are around. We want ietty to keep the network with local agents and vary the relationships.
Ietty plans to have a service renewal around next February and is going to perform enhancement of service development, repletion of sales structure and enhancement of marketing function based on this funding. Ietty currently expects to have over 100 million yen ($810,000) annual sales and aims positive balance within this year.
Translated by Azusa Murano via Mother First
Edited by “Tex” Pomeroy and Masaru Ikeda