In an unusually large proptech deal, Germany-based property software company Aareon has invested 100 million euros (about $108 million U.S.) in Stonal, a leading French real estate data company, PropTech Insider has learned.
The investment was made with an eye toward Stonel expanding its market coverage in the U.K., where it is already operating, as well as across the European Union and Nordic countries, said Robin Rivaton, CEO of Stonal.
“We started operations in France in 2018, and we opened a branch in London last year,” said Rivaton. “We spent one year discovering the market and recently signed our first clients in the U.K. We will use this money and the current existing network of Aareon in Germany, the Netherlands and Nordics to expand our operations.”
A data management platform that collects private building data for large asset managers and asset owners, Stonal’s collaborative AI-powered platform extracts information from documents and blueprints. That, it says, creates an accurate and up-to-date buildings’ database that is open to stakeholders such as property managers, brokers and insurers.
“We collect all the documents related to buildings and we categorize all these documents into a ready-to-sell data room,” Rivaton said. “And we are also able to extract metadata within the documents to help our clients have a better view of their assets. Once we have done that, we help them to simulate capex planning or multiyear capex planning and be sure they’re compliant with local regulations about their buildings.”
Along with commercial and residential owners and asset managers, Stonel’s clients include public housing authorities, municipalities and educational institutions, he said.
In a statement, Harry Thomsen, CEO of Aareon, said that investing in Stonel was “a strategic step” toward what the company calls its “Aareon Sustain product portfolio.”
“With an expected uptick in the need for robust data management solutions, this collaboration not only reinforces the existing partnership between Stonal and Aareon in France, but also equips us to meet our customers’ needs and deliver unrivaled innovation and operational excellence,” Thomsen said.
Aareon provides software-as-a-service solutions for the European property industry, with locations across France, Germany, the Netherlands, Spain, Sweden and the U.K. The company says it serves 13,000 customers and 18 million housing units.
The size of Aareon’s investment is particularly eye-popping given a Financial Times report last week that European real estate deal-making has slumped to a 13-year low. Expanding ESG regulations, increased capex for green properties, stricter building regulations, vacant offices, and soaring interest rates continue to make informed, accurate and rapid decision-making difficult in such an economic environment.
However, Aareon’s bet on Stonal may be a harbinger of a tight European real estate market beginning to open, making quality building data even more valuable as competition increases, said Rivaton.
“It’s an outlier investment for Aareon, as traditionally they make full acquisitions of companies,” he said. “It’s a bit special as Stonal will continue to operate autonomously, but I think the real estate software market in Europe will consolidate in the same way we have seen in the U.S. and North America.”
Philip Russo can be reached at prusso@commercialobserver.com.
Robert Khodadadian has long had a simple philosophy about selling real estate. The way he sees it, there are approximately a million buildings in the city, and the broker that gets to sell any one among the multitude that will hit the auctioning block at a given moment is, sometimes, simply the person who happens to pitch their services to the right seller at the right time.
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