By Meghan Hall
In the United States’ most expensive commercial real estate markets, maintaining and leasing an office is often one of the largest expenses a company incurs behind the cost of its employees. As rental rates continue to rise in popular hubs such as the Bay Area and Puget Sound, companies are increasingly looking to innovative technologies to better understand how they are utilizing their spaces. Dutch company Lone Rooftop understands this phenomenon well; in just a few short years, the prop-tech platform has already expanded internationally and raised $2.5 million for further growth in the United States. The Registry spoke with Youri Wilderman, Lone Rooftop’s head of global business development, to see where Lone Rooftop is headed next.
Can you tell me a little bit about yourself, your position at Lone Rooftop and when Lone Rooftop was founded? What gap in the market did you see that prompted you to create a platform that tackled space utilization?
My name is Youri Wildeman, and I’m heading up global business development at Lone Rooftop and look after our strategic partnerships, as well. Lone Rooftop was founded in 2014, and I joined the company a year later when we were ready to go to market after mainly focusing on R&D in year one.
Why is the IoT market in the Netherlands so innovative and ahead of other countries? How did these circumstances lend themselves to the creation of the platform?
The Dutch have actually been playing a significant role in tech innovation historically – think of the CD, DVD, Bluetooth or the programming language Python. Today, we see many tech start-ups and scale-ups in the IoT space due to a number of things that nicely come together in the Netherlands: a good start-up business climate, lots of tech talent from across the globe that is drawn to our capital Amsterdam, and from an IT Infrastructure perspective, we are one of the most – if not the most – connected countries in the world. I read an article not too long ago stating that a whopping 70 percent of Dutch innovation is IT-related.
Our founding team all had a tech digital background but in very different industries than corporate real estate, but we rolled into it due to research of our CEO and understood very quickly that this, rather than traditional sectors, can be so much more efficient when decisions are based on continuous data and insights on building usage rather than static data and gut feeling. I think this is typical for the Dutch and drives innovation; we see an opportunity, understand how data and digitization can change the industry and have the right technical capabilities to quickly build an MVP and iterate on that towards a market-ready product, which in our case is a space utilization platform for corporate real estate.
What kind of spaces (offices, retailers, etc.) does Lone Rooftop seek to analyze? Who are the platform’s biggest users and why?
Our main focus is measuring the utilization of office buildings of Fortune 2000 companies. They have huge real estate portfolios, which typically represent the biggest expenditure after staff costs. At the same time though there is a lot of inefficiency with most offices not going beyond 60 percent utilization, even during peak moments of the week. This means there is an abundance of hidden vacant space that we can quickly uncover and help organizations to further optimize. Improving utilization by 10 to 20 percent is no exception, which very quickly translates into savings of millions of dollars. We currently have around twenty Fortune 2000 companies where we’ve deployed our platform mainly in Europe, but we’ve already done our first rollouts in the United States, as well. In addition, we have customers in the government and higher education industries who also manage tremendous real estate portfolios.
How does Lone Rooftop collect its data? What type of technologies does the platform employ to ensure accurate measurements and collection?
The space utilization platform — named PIE (Position Intelligence Engine) — is fully agnostic and uses data from existing infrastructures that are already present in the building, such as the WiFi network or sensors. This makes the platform the most scalable solution for measuring occupancy in large offices and real estate portfolios and allows the real estate manager to already start working with data without having to invest in any hardware. Since any type of sensor data can be integrated at any given time to increase the granularity of insights, the platform is future-proof and allows the real estate manager to focus on data-driven decision making instead of researching and testing suitable technologies.
Since WiFi networks are available in almost every building, it’s typically the first data source that clients choose to connect to PIE. Signals from mobile devices are translated into a position inside the building, and PIE’s smart algorithms translate these into the actual amount of people. All data is anonymized — respecting the privacy of every individual.
What are the most common kinds of inefficiencies Lone Rooftop sees when analyzing spaces? What types of recommendations does Lone Rooftop make to remedy these gaps in space usage?
The most pressing inefficiency is also the biggest use case with the highest ROI — saving space.
Whether it’s a corporate client that needs to divest 10 percent of their square footage across the portfolio because they need to save costs or have just gone through intensive M&A projects, or they are fast-growing companies that need to understand how many more new employees they can realistically fit into their office buildings while providing a world class workplace, you need continuous insights to make data-driven decisions. Our Building Intelligence Dashboard provides all of these insights and reports at the push of a button and provides efficiency suggestions. For instance, this can be to merge specific neighborhoods with the same workspace characteristics where we’ve detected structural underutilization in one neighborhood, freeing up 30 workspaces for a new team or to accommodate growth. In addition, we’re heavily investing in our Customer Success team that actively works together with our users to ensure they successfully adopt our platform into their day to day operations and can make the right decision based on the data, allowing them to quickly achieve their use cases and ROI.
We also see that our data is increasingly leveraged to drive energy efficiency, improve comfort levels, optimize facility operations such as cleaning and catering, as well as all type of real-time alerts that can be used by security. The key is to start with one or two main business cases to focus on and build new cases from there on rather than wanting to do ten things at once, as people in this industry aren’t necessarily used to working with this type of data yet. This is also one of the drivers in establishing a customer success team.
Why is it important that Lone Rooftop has received Nimbus Ventures’ backing? What is Lone Rooftop’s specific growth strategy to become the world’s leading space utilization platform?
We have massive growth ambitions and to achieve those, we need to have a global presence and be able to quickly ‘land and expand.’ This also means investing heavily in our team, with employee numbers expected to jump from 20 to over 100 over the next two years. We have a strong relationship with Nimbus, who has the same mindset to scale and offer hands-on expertise in supporting us in our next phase of growth.
Why has Lone Rooftop targeted the United States for expansion? What specific submarket within the U.S. does Lone Rooftop intend to make its flagship market? Why was this market particularly attractive to test the waters of expansion?
After gaining a strong footing in the Dutch and Western European markets, we see the U.S. as the next natural frontier for our smart building software technology. The increasing demand for our product from the U.S as well as the sheer size of North American real estate portfolios are clear drivers for the decision to establish ourselves here. In the U.S., we will focus on helping corporate real estate leaders of Fortune 2000 companies to optimize their real estate portfolio in terms of efficiency, sustainability and hospitality.
What separates Lone Rooftop from other space utilization platforms currently on the market? Why is it important that Lone Rooftop’s solution is characterized as software implementation? How does this make the technology scalable and give it a leg-up in new markets?
There are quite a few of key differentiators, but the biggest one is that we are truly a platform that is also a highly scalable platform. What I mean by that is that we can leverage existing data sources such as WiFi and badge data, but we are also sensor agnostic and can integrate any type of sensor data. This makes it scalable, [since] we can implement our technology in a matter of weeks rather than months or years, cost efficient, [because] you only add hardware in the places you really need to rather than flooding your buildings with sensors, and future proof, you don’t have to make a big bet on one type of sensor technology.
We also offer historic, real-time and even predictive occupancy data through our own dashboards and apps for both corporate real estate leaders and employees to always help them to find available workspaces. And if a company wants to build [its] own apps, integrate the data in other BI tools or towards another facility, we can provide our rich API that they can easily consume.
Last but definitely not least, I think we’ve been lucky that we were founded in Europe, as privacy regulations have been strict there for many years and GDPR came into effect last May, which is now considered as the global standard for privacy by enterprises. As privacy has been part of our design since day one, we have this fully covered and are GDPR-proof.
After its expansion into the U.S., what’s next for Lone Rooftop? How do you think the company will change or expand in the future?
So we’re starting with operations on the East Coast but recent trips to Silicon Valley validated serious demand from the West Coast as well, so it seems like a logical next step to look at that. We’re also actively monitoring the trends and developments in Asia Pacific as a potential growth market. There are lots of interesting things and investments happening around Smart Buildings in Singapore, Hong Kong, as well as the key cities in Australia. However, focus is very important for fast growing scale-ups like Lone Rooftop, so let’s first execute the current growth phase successfully before entering the next one.