For most of us, the way we purchase retail goods as consumers has changed dramatically over the past few years. The plethora of payment options, add-on services, targeted offerings, financing solutions, delivery methods and other innovations to our buying journey as consumers, makes it hard to imagine that not too long ago the most innovative way to purchase was to choose what you want out of a printed catalog and send the seller a check via snail-mail.

This drastic change in the way we purchase retail goods required two distinct steps-
1) digital transformation of the buyer journey
2) embedding of financial services into the digitalized buyer journey. However, while for consumer retail purchases and other industries such as financial services, media and healthcare, digital transformation has been in full swing for several years, ithasn’t equally matured across all industries and all transaction types. For example, we might be regularly buying from digital-only retail brands offering BNPL (buy now, pay later) solutions for our personal needs, and at the same time still choosing items out of a catalog, speaking manually with sales teams and sending vendors payments via check when making B2B transactions on behalf of our workplace.

The same is true in the real estate industry. You can still find GenZ tenants in large cities buying clothes off an app in the morning, and then heading to the post office in the afternoon to send their landlord a check together with the paper rent slip she left at their doorstep. Or a construction contractor who pays at the local coffee shop with his phone, but when it comes to the materials procurement process in his construction project, he is still using an offline spreadsheet to track the manual payments his accounting team is making to each vendor.

Over the past few months, we have seen one of the leading early-stage venture capital firms in Israel, an increased entrepreneurial focus in trying to innovate real estate by both digital transformation of manual processes and embedding financial services into these digitized solutions. This is true across home ownership, rentals, real estate investing and construction.

For example, Agora, an Israeli startup in the real estate investment management space, offers a software solution that is tailored specifically for real estate firms - providing digitization and automation for everything from fundraising, through investor relationship management to reporting.

Lendlord, an Israeli-founded start-up based in the UK is focused on small / medium scale real estate investors, offering digital transformation in the way they manage their investment portfolios. By creating a digital one stop shop to manage all aspects of real estate investments, Lendlord not only improves efficiency and ease-of-use by transitioning manual processes to digital, it also offers users financial services such as finding a mortgage tailored to their investments based on the data already stored on the platform.

Lvble, an Israeli start-up focusing on the US rental market, is not only shifting rent payments from paper checks or expensive manual credit card transactions to an innovative digital platform, it’s also offering users a financing solution that enables them to pay their rent at any point during the month while ensuring the landlord always gets paid on time.

On the construction side, early-stage Israeli start-up StructShare is taking the manual, tedious process of procurement for construction projects and offering contractors a SaaS-based solution that automates and digitizes the process of ordering, receiving and paying for construction material. Once the entire project is managed through a digital platform, it’s not hard to imagine how construction-focused startups can also start offering financing solutions, insurance solutions or other value-added financial services based on the data stored within the digital platform.

“There are obvious reasons why digital transformation and embedding of financial solutions are slower to proliferate in the real estate industry— it’s much harder to change the way traditional organizations do business than it is to change the behavior of single consumers making personal purchases.”

There are obvious reasons why digital transformation and embedding of financial solutions are slower to proliferate in the real estate industry— it’s much harder to change the way traditional organizations do business than it is to change the behavior of single consumers making personal purchases. An investment firm trusting new software to manage multi-million-dollar portfolios, a construction company changing the working procedures of its contractors or a property management firm trusting the underwriting abilities of an unknown FinTech company are all processes that take time. However, based on the number of players innovating in this space and the impressive traction they are already gaining, it’s clear that it won’t take too long until the way we make real estate transactions today will seem as out-dated as sending checks via snail-mail to vendors who sent you a paper catalog.