The Exchanges

Q Great. Tell me more about the fund. Did you come as an, you know, were you an operator you sold and then you, you launched the fund or you have always been in sort of on the fund side?

A Uh, no, it's been, it's been an interesting journey to this point, Nathan. Um, so I grew up in India. My dad's a first time entrepreneur. He's a real estate developer back in India. So kind of grew up in that environment, uh, came stateside for college. And then my first job out of college was at Blackstone real estate. Um, so I made a bunch of real estate, right? Equity investments there across different asset classes, uh, went to business school after that. At that point, I got more interested in product and tech, uh, then helped out a couple of friends with their prop tech companies. And then eventually, um, by happenstance, I, I got a call by a Japanese real estate developer to help them run their corporate venture capital arm based off Tokyo. They were looking to do more things in the U.S. Uh, this was in 2019. Um, so I went, visited Tokyo, spoke to this company, and kind of got connected with two more institutions, and they wanted me to do the same thing, which is help their CVCs gain more exposure to U.S.-based prop tech. Uh, so at that point, I kind of built out this Uh, consulting business, which is the first iteration of Akia Ventures. Um, as the business kind of kept growing, um, at that point, I convinced my now co-founder, uh, and GP in the fund, Nobu, who was my classmate, uh, in business school to join the team. Uh, so we kept on building the consulting side of t…

AI assessment note: “built out this Uh, consulting business, which is the first iteration of Akia Ventures.”

Q is a great storyteller. He raised like crazy SoftBank pushed the raise, obviously, but ultimately didn't create value in terms of market capitalization. But again, highly strategic, makes sense why you guys obviously did that deal with him. It makes sense why a lot of PropTech folks want him on the cap table. So totally understand that. Um, what about the hospitality space? Can you tell us the story there?

A Sure. Um, so we invest in this company called StayFlexy. Um, it came out of Y Combinator's last cohort. Um, they're building the modern OS for hotel owners and operators. Um, and, uh, really to think about it is, you know, the initial wedge, the foot in the door for them is allow flexible check-in and check-outs. Uh, so Nathan, you may have gone to a hotel room, you know, your flight may have landed early and you wanted to check in at nine a.m., but you can, you could only check in like post two p.m. And then you wanted to say check out late, but you had to check out by 11 a.m. So what StayFlexy is solving for is essentially at the point of sale when you're making a reservation, you get to select the R that you can, you want to check in. So it could be nine a.m., 9:30 a.m., 10 a.m., and then you also get to check out the R that you want to check out. Could be three p.m., 3:30 p.m., and four p.m. Turns out to actually have this flexibility is a pretty complex problem at the back end. So they've Building software and product for the property managers to kind of still run the ops of the hotel business while solving for this in the front end.

AI assessment note: “we invest in this company called StayFlexy. Um, they're building the modern OS”

Q Interesting. So, so how do you work with founders? You write the seed check. I mean, do you get active in product discussions with these founders or you just sort of write the check and move on?

A Uh, we love to get active with the founders. So just with the case of stay flexy, one of the things we've been focused on is the go to market strategy. Uh, we've been having daily calls with the founding team. Um, we are looking at bringing on board a couple of pretty senior advisors from the hospitality industry. Um, because I think, you know, there's a lot of progress that we've made on software and product side. Now we want to understand the nuances of the industry and make sure that we are also focused on the top line and the product market fit. Um, so that's, that's been a lot of things we've been doing. We've been helping them with hiring. We're looking to get on board a VP of sales for the team, and we've been interviewing candidates along with the CEO. And also, this depends on, you know, how much the portfolio companies want us to get involved. You know, there's some times where the founder wants to check in once a week, and that's fine by us. There are times when the founder wants to check in once a month, that's also fine by us. Our role is to be available and to be cognizant of what the founder might need and be prepared when he or she reaches out.

AI assessment note: “we love to get active with the founders. So just with the case of”

Q You quoted residential home sales, but how do you split out the buyers of those residential homes into cohorts? Consumers like you and I versus big funds, institutional funds buying it. Isn't, isn't that a bad proxy to use just pure residential home sales?

A True. That's a good point. Um, and really if you want to slice and dice it more, Nathan, you know, there's the individual homeowner, uh, that's buying a home for the first time. There's an individual homeowner that's buying a vacation rental or a second time home as rental property. And then among the funds, you've got the, you know, small to midsize funds that are buying anywhere between 20 to a hundred assets. And then you've got, you know, the large private equity funds that are buying 10,000 assets at a time. Um, so you've got the whole spectrum. Uh, there are certain markets for sure where the large private equity funds are buying, you know, thousands of assets and that's crowding out the market. But, uh, even then, if you look at like the total volume of residential sales across the U S that's still a fraction of the total market. So to say that, you know, larger state private equity funds are kind of dominating the U S home residential market, I think would be factually incorrect.

AI assessment note: “if you look at like the total volume of residential sales... that's still a fraction”

Q Yeah. Interesting. Okay. How is all of this funding a thesis, a core belief you have about property and then how is that determining and how is that guiding you in terms of where are you playing capital in the prop tech companies?

A Um, I think, you know, last year, um, was kind of a watershed year for us in PropTech. Uh, some of the trends that we'd been looking at kind of got accelerated by more than 10 years. Um, and to give you a sense, you know, we divide real estate across a few different asset classes. Uh, so when you look at office, uh, this whole trend around healthy buildings and technology promoting healthy buildings has been accelerated. Um, when you look at, you know, uh, residential, Um, the one, one underlying theme that we are backing pretty strongly is community and having a sense of community in multifamily properties and any technology that kind of promotes that. Um, when you look at hospitality, um, I mean, the hotel sector was really badly hit. Um, you had occupancy levels at all time lows across major markets in the U S. Um, and usually it's during those points where the propensity to adopt technology is at an all time high among property managers and hotel owners and operators. Um, if you look at retail, brick and mortar retail almost, um, you know, was again, struggling. Um, so anything that brings people back to malls and makes it more experiential and technology that drives it is something we are bullish on. Uh, on the flip side of retail struggling, Nathan, was e-commerce was on fire. Uh, and as a result, you know, you barely had any spaces in warehouses. So we had warehouse owne…

AI assessment note: “we divide real estate across a few different asset classes. Uh, so when you look”

Q Interesting. Now, did you and your partner split? Were you friendly? Did you just split carry fifty-fifty or how do you, how do you do that when you launch a fund? How do you talk about carry splits?

A Sure. Um, so it's, um, you know, there are a few things that you need to bear in mind. It's the, uh, it's the amount of work that's already been put in. Um, it's the experience in the background that you're bringing to the table. Um, and it's the opportunity cost of each founder, uh, for kind of, you know, leaving their existing jobs to start something like this. Uh, bear in mind that the, you know, the, the CAD interest for fund one may not be the same as that for fund two, because by the time you're looking at fund two, it's more, more, more of an established vehicle. So, you know, the economics might change at that point.

AI assessment note: “there are a few things that you need to bear in mind”