Openn Negotiation Ltd (ASX:OPN) continues to make progress with property technology (PropTech) commercial activities in the lucrative North American market through wholly-owned subsidiary, Openn North America, Inc.
Pilot discussions are being advanced with major real estate Multiple Listing Service (MLS) groups in the US and Canada while the company is in detailed pilot planning with three additional MLS groups - potentially exposing its PropTech to an extra 180,000 realtor members.
On commercialisation path
Existing pilots in the large North American market are progressing well for Openn NA with work underway for commercial market launch and scale-up.
Openn’s PropTech aims to improve transparency in real estate transactions for the benefit of buyers, sellers and real estate agents.
This is done through the company’s novel proprietary software, which has enjoyed rapid adoption in the Australian and New Zealand property markets, being used to facilitate approximately A$5 billion worth of real estate sales since 2016.
Positioning in North America
Openn executive director and Openn North America president Duncan Anderson said Openn’s focus was transparent digital offer management.
"We are positioning ourselves to meet the needs of the US and Canadian markets in such a profound and revolutionary way. Openn is pleased with the opportunity to impact the North American industry with transparent and equitable transactions.”
In addition to pilots with the Canadian Real Estate Association (CREA) and major US MLS groups, the company has advanced planning underway with three additional top 20 US MLS organisations to prepare the Openn platform for use in new markets, presently with more than 175,000 agents.
Along with the announced pilots currently underway, these relationships provide Openn with a potential addressable market of more than 350,000 real estate agents in the USA and Canada.
Broad pilot access
Openn now considers it has sufficient breadth of pilot access to cover the needs of the broader market and is focused on consolidating these learnings into the first commercial release.
The combination of market awareness and continued education through REALTOR.ca creates a significant opportunity for scale adoption, with REALTOR.ca acting as the observer for all Openn properties - educating consumers, agents and other stakeholders on the Openn process.
Openn’s PropTech will complement the potential for scale adoption by providing a basic version of the Openn platform for free to all agents in Canada. The premium version is accessible to subscribers and will provide a range of automation, performance management, market insights and lead generation tools to agents.
Subscription pricing is expected to range from C$40-$60 per month per user. More comprehensive broker packages will be made available.
In the USA and Canada, the Openn platform is positioned as an agent-to-agent collaboration tool. Buyers submit their offers through their licensed buyer agent, just as they do now. They are then provided with all the benefits of transparency through Openn’s PropTech.
Upcoming milestones
Progress of this plan over the next 3-6 months can best be tracked by monitoring Openn’s delivery of the following milestones:
• Openn is working with complementary technology partners on integration and sales packaging that enhance user experience and speed market access across Canada and the USA.
- Openn considers the measure of success on this component will be the delivery of commercial agreements and technical integration with collaborative partners with a combined market reach of 20% or more.
• Integration with REALTOR.ca is comprehensive. It ranges from single-sign-on for all licensed Canadian agents to embedding Openn data on the REALTOR.ca website. There will be multiple integration deliveries, both prior to, and post commercial launch.
- Openn considers the measure of success on this component will be delivery of product releases with REALTOR.ca or CREA integration components.
• The lite (free) and full version (paid) of the Openn platform is being developed for piloting.
- Openn considers the measure of success on this component will be the first set of live transactions (properties sold) on the Openn platform.
Pilots progressing well
The current pilots of Openn’s unique PropTech with substantial real estate industry groups, including CREA, Triangle MLS and bridgeMLS, are progressing well. Programs are being refined to adapt to each unique regulatory and industry environment.
Openn anticipates that successful pilot programs will lead to commercial engagement opportunities in these very large addressable markets.
CREA's chief executive officer Michael Bourque said: “Multiple offer scenarios have become increasingly commonplace in today’s real estate environment.
"Canadian property buyers and sellers seek greater confidence in the process, while Canadian REALTORS® seek tools to enable and more easily manage these situations. We’re very excited about the potential of this pilot to address both.”
Revenue opportunities
Along with agent subscription revenue, the company is investigating opportunities to monetise property sales data and analytics as Openn grows market share in various geographical markets.
This data provides a unique opportunity for agents, collaboration partners and Openn to derive additional revenue, and provide real-time information, via the consumer supportive direct marketing potential unlocked by the Openn platform. Openn is in discussion with third parties who will benefit from the data.
Openn is also in discussion with significant users of aggregated analytics in the US and Canadian markets. These opportunities range from high-level risk modelling to property-level automated valuation support.