JLL Leans Further Into 'Exploding' Office Proptech Space With New Deal
The global commercial real estate firm reached a deal to sell one of its own workplace tech applications to HqO, a startup it invested in last year, as a way to combine two types of office tech offerings into one platform, JLL Technologies President Sharad Rastogi told Bisnow.
In exchange for the app, JLL Jet, the firm is taking a greater ownership stake in HqO, Rastogi said. Through its JLL Spark arm, the firm participated in the startup's $60M Series C funding round last year. The firms didn't disclose the amount of money JLL invested or the stake it owns, but Rastogi described its investment as "very large."
The deal also includes a global licensing agreement through which JLL can directly sell HqO's product to its clients around the world.
Founded in 2018, HqO provides a "workplace experience platform" for office tenants to better communicate with their landlords and property managers on issues like common area availability, visitor access and parking.
Rastogi said JLL Jet, which launched 18 months ago, has focused more on the interactions between employers and employees, such as booking desks and conference rooms within an office space. He sees these as two distinct offerings — tenant experience and employee experience — that had historically been separate but are increasingly merging, which is why the firms decided to combine the JLL Jet and HqO platforms.
"With Jet, we’d have to go out and build out all the tenant features, which we didn’t have today," Rastogi said. "So rather than having two paths that would eventually compete with each other, we figured the better answer here was to combine the resources into a single product, simplify the market, do a much wider distribution and accelerate the growth of HqO."
The deal is part of JLL's larger push into the office proptech space that it has accelerated through a string of recent acquisitions, investments and partnerships.
In October, it paid $300M to acquire property operations platform Building Engines, and in January it acquired artificial intelligence platform Hank for an undisclosed amount. JLL Spark has invested over $340M since 2018 in more than 40 proptech startups, many of them focused on the office sector. And it has reached partnerships with more than 20 office proptech firms that offer a variety of solutions.
"We are seeing this category exploding," he said of office proptech. "You will see us doing more investments with Spark, and some of those will become partners, some of those we may acquire, but we’re building out this whole ecosystem to meet the needs of both investors as well as occupiers."
JLL isn't the only major brokerage firm pushing deeper into the proptech sector. CBRE in January acquired occupancy planning tech firm Buildingi, and it has invested into proptech venture capital funds. Cushman & Wakefield has also put money into proptech VC funds.