Prop-tech venture building group, Castle One, has announced that HL Hall and Sons Holdings (‘Halls’) has made a significant investment in the company, with a view to unlocking new, synergistic value for the benefit of the real estate industry – both locally and abroad.
Castle One was founded by tech entrepreneurs Jonothan Rawson and Mark Forrester and has been active in the emergent prop-tech space since 2018. The venture-building group is currently invested in several real estate technology companies, including Prop Data, led by prop-tech veteran, Mark Buttress. In recent years, Prop Data has grown to become South Africa’s leading real estate business and marketing automation platform, enabling many of the country’s biggest brands and over 19,000 real estate professionals. The company is also attracting customers in foreign markets such as Canada and Dubai.
Among Castle One’s other ventures is reOS, a bank-integrated rental payments and portfolio automation platform that uses blockchain technology to transform the business of rental professionals, while radically reducing costs.
According to Rawson, the investment by Halls into Castle One will enable the group to accelerate its innovation journey, while extending its presence in foreign markets.
Halls is a 130-year-old family-owned business, with local and international holdings across several sectors – from data and analytics to property investment and pharmaceuticals. Halls’ portfolio companies include Lightstone, which provides information, valuations and research to the financial, property and motor vehicle industries.
Halls’ story as an independent, family-owned group resonated strongly with Rawson, whose family has been in real estate for over 40 years. After co-founding and selling out of South Africa’s largest tutoring platform, Teach Me 2, Rawson saw an opportunity to harness technology to transform the business of real estate. Rawson recognised the pressures felt by real estate professionals in an increasingly competitive environment and was struck by the industry’s need for a more coherent approach to digital transformation, so as to deliver new orders of value to real estate operators and consumers alike.
Rawson partnered with Forrester to set about building the Castle One group. Forrester, whose family has been connected to Halls for generations, was also co-founder of e-commerce and website creation platform, WooCommerce, which now powers millions of online stores around the world. The parallels with Prop Data, which enables seamless website creation for the real estate space, are particularly relevant. Says Forrester, ‘I’m a huge admirer of Prop Data’s philosophy of empowering agents and agencies to build their brands and to truly own their customer relationships. This is an essential part of democratising commerce in our digital age.’
Although the prop-tech space in South Africa has attracted substantial attention in recent years, Rawson notes that start-ups have tended to struggle – even when they have had something special to offer. ‘This is largely due to the size of the formal South African property market, when compared to markets like the US, but also the multi-faceted nuances of the real estate business itself, which newcomers to the industry tend to underestimate,’ says Rawson.
According to Rawson, the industry’s unique dynamics present a number of ‘invisible barriers to innovation’. Castle One’s venture-building model, which involves investing in and building new products and ventures, while creating synergies and network effects, looks to address this challenge. The uniqueness of its model has attracted investment from various role-players in recent years, culminating in the recent transaction with Halls. ‘Our investment into Castle One is tremendously exciting as our companies have strong shared values and a common vision for how technology can benefit the real estate sector,’ says Halls CEO, Pete Backwell.
While many prop-tech innovators have looked to displace the role of the estate agent, with mixed results, Castle One has taken the opposite approach – investing in ventures which champion the role of intermediaries in the future real estate services landscape. ‘We’re excited about the myriad ways in which technology can amplify the value provided by real estate professionals to consumers, while ensuring that the business of real estate remains compelling and sustainable for everyone involved,’ says Rawson.