Kylie Davis:

Welcome to The Proptech Podcast. It's Kylie Davis here, and I'm delighted to be your host. As we explore the brave new world where technology and real estate collide. I passionately believe we need to grow and create a sense of community between the innovators and real estate agents and property owners, and sharing our stories is a great way to do that.

Kylie Davis:

The aim of each episode is to introduce listeners to a Proptech innovator who is pushing the boundaries of what's possible. And to explore the issues and challenges raised by the tech, and how they can create amazing property experiences.

Kylie Davis:

This week, we are looking at the extremely sexy sub-sector of Proptech, which is BMS management and the optimization of cooling and air conditioning equipment in commercial buildings, and the use of AI and big data-driven algorithms to maximise performance and provide transparency on how your systems are operating.

Kylie Davis:

Now, what? You don't believe me, that this could actually be sexy? Well, I do get it. It's pretty dry or a cool topic. But my guests are Iain and Tim Stewart, co-founders of Exergenics, which was the winner of not just the Most Innovative Startup in the Smart Buildings and Cities category, but also the Startup of the Year at the recent Proptech Awards, 2021.

Kylie Davis:

Now Exergenics caught the imagination of judges from both the residential and commercial space over our many other start-up winners, which is a testimony to Iain, who is an engineer, and Tim, the salesman and marketer, and their ability to explain their tech. So, here to tell us more, Tim and Iain Stewart, welcome to the Proptech podcast.

Tim Stewart:

Thanks very much.

Iain Stewart:

It's good to be here.

Kylie Davis:

Yeah. So now look, there's two of you on the call, so we're going to have to split it up. You'll have to let me know who's answering what question. So, who's going to take the first question, which is always, what's your elevator pitch for Exergenics?

Iain Stewart:

I think I'll take that one. I've done this more than a few times. So it's Iain here. Yeah, our Elevator pitch. I guess Exergenics creates software that makes commercial air conditioning and refrigeration systems more efficient and sustainable.

Iain Stewart:

So we've developed a machine learning model, which utilises historical data to determine how efficiently the current system is performing. And then recommends changes to the control of that system to improve the overall performance.

Kylie Davis:

Fantastic. So, how sexy are air conditioning and water cooling systems in Proptech? This seems like a strange thing to be creating a tech around.

Iain Stewart:

Certainly not on the sexy side. We're back of house, we're hidden away. I like to be in a cold, dark room. Maybe not cold, but a dark room by myself, modelling for 12 hours. Yeah. We've had clients say to us, "Oh, jeez, you must be fun to hang out with on a Friday night."

Kylie Davis:

But you are because, I've hung out with you on a Thursday night and it was awesome. Right.

Iain Stewart:

That was very good fun. I guess the engineers as a bunch, do surprise sometimes. But no, we're solving boring solutions for boring problems, I think is the best way to put it. But they're important problems and can help the fight against climate change, so that's why we're doing it.

Kylie Davis:

Awesome. So let's have a chat about that, because I guess you're part of that whole building management system infrastructure that's sitting inside Proptech and inside real estate. How have these systems traditionally been managed, and what are the issues with that traditional management structure?

Iain Stewart:

Yeah, it's an interesting ecosystem. You've got the mechanical contractor, the controls contractor, the facilities manager and the building owner themselves, and then any consultants who come in. The classic way that the BMS have been managed is with proprietary systems. So, those proprietary languages lock in customers, I guess. But once you put the system in there, you're in for the next 20 years and you've got those service agreements.

Iain Stewart:

That has a couple of impacts, there's not been a common ontology in the system. So, that's a common language in the industry-wide naming convention. And it means there's very little interoperability between systems, and it's hard to extract the data out and apply a machine learning model to thousands of buildings. You've got to go through and look at the naming for that individual one.

Iain Stewart:

And then, data's being stored onsite in the controller, and we're now starting to see analytic platforms through data warehousing, which suck this up. But I guess the big impacts from the traditional management. If you've got that vendor lock-in and you're stuck with that one vendor, if buildings do need to be optimised, it's bespoke each time. And you've almost got to translate everything into that common information model and do it again.

Iain Stewart:

Then the other one that we've seen is actually with the building owners. The HVAC electricity is sometimes not great. So you've got almost the fox guarding the hen house. And they're quite complex systems, that every controls test is saying, "This control strategy is the best thing since sliced bread." And you've almost got to take them at their word because there's no checks and balances there, I guess.

Kylie Davis:

So, you've got a really highly technical sub-sector building ownership industry, about a topic which, I'm going to be honest, is probably quite dry and not very sexy, that most people really care about, in a language that no one understands. And a whole bunch of quite jealously-guarded, proprietary vendors, basically saying, "It's okay. You don't have to think about this, we'll look after it for you."

Kylie Davis:

But then, in abdicating that responsibility to understand it properly, you're actually, I guess, you might be making it convenient in one short-term way. But actually longer-term, you're locking yourself into additional costs and a lot of inflexibility, I imagine, around these systems. Especially if you're running a big portfolio of lots and lots of properties. Right.

Iain Stewart:

Yeah, yeah. Exactly right. I guess that's the key problem that we're trying to solve is that if these systems are running inefficiently, it's obviously a financial drain on the building owners. It hinders them in getting to their net zero targets, and there's a lot of ambitious targets out there.

Iain Stewart:

And then, with adequate data-driven insights and the data-driven approach, they're actually really difficult systems to apply. So people can spend months and months tuning and building and iterating a control strategy just to get half a NatHERS star bump in their energy rating. But it's a really time and labour intensive process. And I guess that's why we've developed the tool and the optimization models to try and fill that gap.

Kylie Davis:

So, how big a problem is this? I mean, and then also, after you've done all of that, you've still got the girl in marketing complaining that on a dig container of 40 degrees, she's still freezing and needs to take her jumper into work. That was me, by the way, when I worked at CoLogic. 'Why is it so cold in here?" So, how big a problem is this in the commercial sector? Have you got any numbers that we can put around it to help us see how big the opportunity is to solve?

Iain Stewart:

Yeah, well, we've actually recently done our global market sizing and put it around a $5 billion problem globally in key target markets, Asia, Middle East, Europe and North America.

Kylie Davis:

1% of that do will do.

Iain Stewart:

Yeah.

Kylie Davis:

Yeah.

Iain Stewart:

But I guess more importantly is the time commitment. There's a lot of the same efforts being repeated across the ecosystem of people going in there and doing this tuning manually. And in some cases, building some pretty impressive spreadsheets that do some of what our MATLAB based model can do.

Iain Stewart:

But the time and labour that's required and the amount of effort that's spent here, it's something that can be very repeatable. So yeah, I guess that we're trying to shorten that timeframe from data collection to implementation. And make this a really, very repeatable process.

Kylie Davis:

Okay, awesome. So, how does the technology work? What does it do? What does it look and feel like if you're a user?

Iain Stewart:

I would say basically, it uses historical data and a machine learning layer, which is able to look at how efficiently different pieces of equipment are behaving based on a whole lot of factors. So, ambient weather conditions, what's the cooling demand within the building. All of these things factor into how efficiently that piece of machinery... If it's the chiller, how efficiently can that chiller transfer heat from the condenser water line to the chilled water line.

Iain Stewart:

If it's a cooling tower, how do fan speed and ambient wet bulb, and the flow rate for the condenser water actually impact how much heat we can reject through that cooling tower. And then, what impact does that have on the other bits of the subsystem? So obviously, that cooling tower is serving the chiller. And then, if we can modify those temperatures, what's the overall impact on the system efficiency?

Iain Stewart:

The algorithms that we use, are bespoke to each piece of equipment and the system as a whole. But really, we're trying to get a good grasp of what each piece of equipment is doing. What the subsystems are doing. And then, what the system is doing as a whole. And then once we have got that, it's a simulation tool.

Iain Stewart:

So it is all code at the moment. Unfortunately, there's not really too many shiny widgets that we can show people. We are developing a dashboard for the recommendations that come out, but it is very much code and data. So all of that goes in. We can then simulate how well that plant is operating and, I guess the core value added and the optimization loop.

Iain Stewart:

So, once we've got that ability to simulate the plant as a whole, with every piece of equipment, we run a big optimization loop that takes a couple of days to solve. And feed that model with thousands and thousands of different conditions, like weather and cooling load.

Iain Stewart:

That's able to then, as that optimization loop solves, the model is learning each time what the most efficient way to control that plant is. And the outputs of that then become the control strategy recommendations, or the updates that we deliver to clients.

Kylie Davis:

Right. And so, clients take those recommendations and who uses them? The facilities manager?

Tim Stewart:

I guess a combination typically, it'll be the BMS contractor who will implement or the controls engineer. And then, it will be through the building owner or through the facilities manager or the engineer on site.

Kylie Davis:

Okay. But how does it help the property owner understand what's going on?

Iain Stewart:

Yeah, so I guess the difference with our system is that it's very much open and transparent. So, the property owners can see exactly what updates to controls are going to happen. And then, have a simulated energy sightings from those energy and peak demand reductions from the control logic updates.

Iain Stewart:

So even before a line of code is written in the existing building management system, and that work is actually commissioned, we've got a really good idea of our [Ally's 00:11:31], paybacks and the engineering methodology behind why these changes are happening. So we actually take clients through and go, "Okay, here's how your chillers are performing. Here's how the cooling towers are looking. And this is why the system is actually recommending these changes."

Iain Stewart:

As opposed to a black box optimization solution, which you put the box in, the data comes in, controls come out. And there's no oversight of why it's making most decisions. Where our [crosstalk 00:12:03] box strategies are delivered back to client and the clients own those strategies and can use them in perpetuity.

Kylie Davis:

Yeah. And I guess you've got then the ability to manage it through what you do understand, which is, did it deliver the savings that we thought it was going to, or in the ballpark of them? And if not, why? It's giving you a management tool in that space, which I guess most property managers or property owners do understand.

Iain Stewart:

Yeah, for sure. I think that's an interesting point. With the ongoing data collection, we can also do the measurement and verification of the energy savings because we've already got that data that's coming through. But then, we can rerun the model exactly, as you say, to check that all the recommendations have been implemented correctly.

Iain Stewart:

So, if we're getting the same recommendation as 12 months ago, and it was meant to have been commissioned, we know that that hasn't been implemented correctly on the control systems. That will come out again as a process of the modelling and just act as that check and balance.

Kylie Davis:

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Kylie Davis:

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Kylie Davis:

So Tim, let's hear from you a little bit. And maybe you can answer this question. Because cooling buildings is actually very hot work, isn't it? So, how does Exergenics work in that whole environment space? What's it doing to address climate change?

Tim Stewart:

So Exergenics, obviously we're saving energy costs for clients, but on top of that, we can help abate carbon emissions. So, for a recent work we've just done with Queensland Children's Hospital, there was a 350 tonne per year abatement based on the projections there, which we'll be able to do measurement and verification for a bit later in the year.

Kylie Davis:

So how big was that? 350 tonnes?

Tim Stewart:

350 tonnes per year.

Kylie Davis:

And so, that sounds extraordinarily impressive, but I actually have no context for it. So what does that mean?

Tim Stewart:

I think it's equivalent to about 75 combustion engine vehicles off the road.

Kylie Davis:

Wow. Awesome. I mean, because a property really is one of the biggest polluters and biggest consumers of energy. Like I was saying before, making buildings cool is actually very hot work, isn't it?

Tim Stewart:

Absolutely. I think the commercial property sectors accounts for about 40% of electricity use.

Kylie Davis:

Wow.

Tim Stewart:

And within that electricity use, about 40% again, comes from the central plant. So, it really is a significant energy user. And obviously, I'm responsible for a lot of emissions there as well.

Kylie Davis:

Yeah. Cool. Well, not coo. What role does Exergenics play in taking buildings that are currently a bit dumb and taking them on the pathway to becoming smart?

Tim Stewart:

Yeah, I guess we'd be a little bit conscious not to call the buildings we're dealing with dumb, because, as Iain mentioned-

Kylie Davis:

Sorry. It's my terminology.

Tim Stewart:

It's okay. We're just making them smarter, I would say.

Kylie Davis:

Their owners are very smart obviously, if they're on this path, obviously. Yeah.

Tim Stewart:

Always very clever people. But as Iain mentioned, we take historical data, either out of the BMS or out of an analytics platform. So the buildings we're dealing with, we actually require them to have really good data capture before we're able to run our models.

Tim Stewart:

So, they will already have either a really good BMS in place or an analytics platform on site, that's capturing that data in perpetuity, that allows us to have that historical data to run the model. So, rather than taking a B or C grade building and doing some quite simple tuning, we're looking to squeeze the last few percent out of already really well-tuned buildings with quite high NatHERS ratings.

Kylie Davis:

Right. Okay. So, what's the roadmap for that look like? I'm curious about that. Do the B and C buildings, what do they need to go through before they can get to being able to use something like Exergenics?

Tim Stewart:

Typically, they would have quite an older system, an older BMS in place. And these BMSs, they typically are proprietary systems and they don't have very good data capture. So, they might capture data for two months, or we've seen one that was two days in the past.

Kylie Davis:

Oh.

Tim Stewart:

And that doesn't really help when we need 12 months of historical data to run the model. So generally, it would be getting an analytics platform on site that's sucking up all the data. But even some of those older BMSs wouldn't be able to capture the points that we would require to run the models. So, it might have to be a full plant upgrade. Yeah, yeah. Or an analytics provider going in and actually capturing that data on site before we could, yeah, monitor the way that plant's working.

Kylie Davis:

Could go in. Okay. So, if every building inside a property portfolio was using a platform or was using something like Exergenics, or using Exergenics, what would the impact on that be? How would it change their portfolio? Either how much it was earning or what it looked like? Or how would it change it?

Iain Stewart:

Yeah. We're saying on average, about 10% savings inside the central plant. So, that's without impacting occupant comfort. And I guess the HVAC typically uses around 50% of a commercial building's energy. And the central plant, about half of that again. So, maybe a quarter of the energy of the building is being used in this one room.

Iain Stewart:

So you can think if we knock that down by 10%, it's going to be about a two or 3% reduction in energy across the portfolio. If it was to roll out portfolio-wide. And this might not sound huge. We're not talking ship stations here.

Kylie Davis:

No.

Iain Stewart:

But I guess with these highly performing buildings, a lot of the low-hanging fruit is gone in terms of energy efficiency. Everyone's done their LED light upgrades. They've done tuning. They've put very variable speed drives on everything. All that's done and dusted, and now people are looking for other ways to optimise their performance and where the other opportunities might be.

Iain Stewart:

So, yeah, I guess in that sense, there's two major impacts you'd have across the portfolio. A lot of the Australian REITs are really world leaders in their net zero goals and their building performance. So, we're helping them get to net zero, I guess, by whenever it might be, 2025, 2030, 2027. I know there's a whole lot of goals out there, but we're helping them reach those. And rely less on things like offsets or even require less renewable energy because these systems are more efficient.

Iain Stewart:

And then on the financial side, that's gotten good by chatting to sustainability managers, what they're very much interested in. But if we're talking to asset managers, then there's also the impact on capitalization rate of the asset. So, we're reducing the offsets.

Iain Stewart:

And I know there's massive multiples that a reduction in our piece can actually improve building valuation when it comes time to sell the asset. So, that's another big impact that it'll have across the portfolio. But yeah, I can't put an exact number to that.

Kylie Davis:

No, no. That's all right.

Iain Stewart:

But it's much higher than the direct cost savings themselves.

Kylie Davis:

Awesome. So, I guess this is a tool for buildings that were state of the art when they were first put in a good NatHERS ratings. And making sure that they stay competitive and stay in that space, even against new stock coming into the market with even the latest HVAC devices.

Iain Stewart:

Yeah, exactly. I guess it's ensuring that control of this really energy hungry planet is picture perfect. Is that doing the most efficient job it can, given the equipment that's already in there? So that's, yeah, taking capital upgrades off the table. What else can we do? Where can we find efficiencies and improve that plant performance without going through the headache of capital upgrades?

Kylie Davis:

Okay. Awesome. So, who are some of your clients? Are you able to talk about them?

Tim Stewart:

Yeah, absolutely. So I think we're quite lucky in our process, how we've come to market, that we can work with pretty much anyone across the board. So, we can partner with analytics providers, BMS contractors, building owners, facilities managers, and mechanical contractors.

Tim Stewart:

So, a couple of our early adopters were Melbourne and Monash University, back at home in Melbourne. The savings there, we achieved where between about eight and 15%. And we've just done some work with Queensland Children's Hospital. And that was, we achieved a $75,000 per annum saving on a retro-commissioning there as well.

Tim Stewart:

So, it's completed work. We've got a lot of pilots coming up. So we've got a pilot with a major Australian supermarket chain. So we're getting the data and running that shortly. And we'll be looking to get implemented shortly after that. And then, we've got in principle agreements really, across the board with a couple of the major facilities management companies, a couple of the global systems integrators. And then, around half the major Australian REITs.

Tim Stewart:

So yeah, where a lot of them are deciding what the sites are at the moment and picking some tough ones for us. So, we're going to get that data pretty shortly and run that. And the aim there is to be installed prior to summer. And they'll commission prior to summer. And then, we'll look to measure and verify those results towards the tail end of summer. And then, I do the rollout across portfolios from there.

Kylie Davis:

Very cool. So, what's the reaction been like from those traditional providers of these systems?

Tim Stewart:

It was interesting to start.

Kylie Davis:

I'll bet.

Tim Stewart:

So, we came to the market with the, I guess, traditional black box approach. And yeah, we sat in quite a few of these meetings. And to say the least, it was very adversarial with the incumbent BMS contractor. But since we have actually changed our approach and moved towards this process where we take the historical data, run that through the model and then hand back a report to the existing incumbent BMS contractor. Since we've changed that, they obviously have realised that they get a pay day when they can implement the work. So, the conversation has changed from being quite adversarial to very friendly.

Kylie Davis:

Awesome.

Tim Stewart:

Yeah. So there's less of that, I guess, territorialism in terms of them saying that this is their turf and who are you to play on it? It's still themselves who's really in control of that strategy. We're just helping them find a little bit more efficiency, in their existing strategy.

Kylie Davis:

Okay. Fantastic. And so look, tell me about how big you guys are now in terms of staff size, or capitalization, or whatever you can share with us in that space.

Tim Stewart:

Yeah, sure. So, we're a team of five at the moment and raising capital currently. So, we'll be looking to add another 10 staff in the coming financial year, which is really exciting.

Kylie Davis:

Ooh. And how long have you been around for?

Tim Stewart:

Inception, was what? August, 2019. But then full time, I think we've both been at it since August, 2020. So, going on a year. Yeah.

Kylie Davis:

Fantastic. And so, tell me a little bit about your background. How did both of you come to be running a Proptech startup? This craziness that is Proptech.

Iain Stewart:

Had I known how crazy Proptech was I might have had second [crosstalk 00:25:13]. No, no.

Kylie Davis:

Welcome to the asylum.

Iain Stewart:

Yeah, I actually started off, so it was just me in August of 2019. And then took about a year to convince Tim to come and join me and that we should do this together. But I actually started out in energy performance contracting. So, I was looking at existing building stock and figuring out what capital upgrades, what tuning can we do to make that system more efficient.

Iain Stewart:

That's where I first cut my teeth in the building space. And actually, where I started building or started coding the model that would eventually become Exergenics. That's been going since about 2016. And it's just been incremental improvements.

Iain Stewart:

Then went off to work for ClimateWorks Australia, which is a not-for-profit and think tank, doing energy and emissions modelling at Australia-wide level. I was working pretty closely with CFR rose energy economics team. And figuring out do what these decarbonization pathways look like and in charge of the buildings and industry sectors there.

Iain Stewart:

Which was good to get a hold on how that whole of system modelling looks like. And a bit more of an insight into the energy systems and how the interplay there is going to become really, really interesting with this whole prosumer notion of people are producing the electricity, as well as using it. And batteries and all sorts of things.

Iain Stewart:

But got a bit sick of telling people how the energy system and economy was going to look in 2050 and [crosstalk 00:26:44]. So, yeah, decided we know how big of a gap there is, how much action is required for climate change. That was really the big driver to start Exergenics. And yeah, it was nice. We got accepted into EnergyLab, which is a energy focused startup accelerator. And they really kicked us off in August, 2019. And then, yeah, about a year later, Timbo joined.

Kylie Davis:

So Tim, what's your background?

Tim Stewart:

It's not quite as colourful as Iains. But mine, I had a number of sales roles and then worked my way up into, I guess, business development and eventually, in a joint business development and product management role for an Australian-based logistic SaaS company. So, more from that software side.

Tim Stewart:

So yeah, it's quite a good fit. Iain takes care of the engineering and I take care of the commercial side and we don't really step on each other's toes, which is nice. Not often.

Kylie Davis:

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Kylie Davis:

So you guys are about to triple in size, if you're bringing on 10 and there's only five of you at the moment. Is that... My maths really dodgy. But are you able to say how much funding you're looking for or what round you're up to?

Tim Stewart:

Yeah, so it's seed round. And we're looking to raise a million. And then, in the process for applying for the accelerating commercialization grant to get match funding there.

Kylie Davis:

Got it. Okay, fantastic. What are your thoughts around how we move from where we are now to our buildings becoming smart or our cities becoming smart? Because it seems to me, like you were saying before, Iain, that you got tired of thinking about talking about things that were going to happen in 2050.

Kylie Davis:

It seems to me that while everyone knows that we should be doing stuff now, it all seems to be very high ideals and a long way out into the future before there's a problem. But we know that that time's going to come really quickly. But it seems to be that the difference between where we are now and what's that roadmap look like. What do you think that roadmap looks like?

Iain Stewart:

Well, it certainly requires a lot of action very, very quickly. I guess for me the thing I took out of those big modelling exercises, which you go all the way to 2050 with a goal in mind that's net zero. As an Australian economy, if you're doing that as a business and looking at what's the shift that we can make in our operations today, actually that goal setting seems to have a really significant impact. Because then you're stepping back from that end goal to say, "Well, we know we might have to be 80% reductions in five years time, but that filters back to go, okay, 2030. And where do we need to be now to actually put things on that trajectory?"

Iain Stewart:

So, that effort in itself, it seems like there's been quite a large shift for the boardroom to get involved in. And at a board level, these sort of decisions being made and pushed, especially because of investor pressure, seems to be quite a big one. And the built environment, these REITs are a relatively easy one to actually get to net zero. I know that might be blasphemy in the industry, but compared to some industrial assets and transportation, it's a much easier ask and there's actually huge potential there.

Iain Stewart:

So I think that, yeah, from a technological standpoint, in terms of that more smart cities question, and we've got that vision of where we need to be and how do we get there? It seems that the move away from proprietary systems and this data warehousing trend, is going to be a real game changer. In the fact that, solutions like ours really rely on very large, uniform data set so that we don't have to spend our time integrating building to building.

Iain Stewart:

And if we can focus on the R&D, the actual innovation, and make our models better, make them more accurate and spend time really focused on that, rather than doing these integrations. As soon as that data becomes open and widely available, instead of locked up in proprietary boxes, that may open the flood gates for innovation. And really enables more solutions like us to come through and try and help this fight against climate change. Yeah,

Kylie Davis:

Yeah. That's awesome. That was a great summary. I guess, the way to hit a big target is to break it into small goals and to start work on those smaller goals straight away. Right. Not to wait until later when it seems it'll maybe... We need to act later on.

Iain Stewart:

Absolutely. And I think the interesting one for me is the iterative nature of it. If you look at solar panels and batteries. I saw something the other day that in the last 10 years, battery costs have reduced by 94%. Right. No one, even the international energy agency... And the same is true of solar, the reduction in cost has been extraordinary and no one predicted it.

Iain Stewart:

So you can make these grand plans and then look at actually revisiting those every two or three years, because it's such a fast moving industry. And the energy space in Australia is shifting very, very quickly. And we've got a pretty highly variable grid with all the renewables.

Iain Stewart:

It's at a point now where the plans really have to be iterated, if not every other year, every year. To really look at what's going on. Where do the new opportunities lie? What new technologies can we identify that will help us get there?

Kylie Davis:

Awesome. Okay. So, with your crystal ball hats on, or the Magic 8-Ball, what do you think the next five years is going to hold in this BMS space?

Iain Stewart:

I think if you'd asked 50 people, you'd get 50 different answers.

Kylie Davis:

And the truth will be somewhere in the middle, right?

Iain Stewart:

I guess the shift from proprietary to open systems is something that doesn't look like it's going away anytime soon. That trend seems to be accelerating, if anything. And I think the other thing that COVID's done is actually pushed people to centralise their operations. And start to think, if I've got a portfolio of 100 buildings across Australia, where's my centralised operations? And am I sucking building data from all of those places into one uniform building model?

Iain Stewart:

So, having that ontology and either doing your own data warehousing or outsourcing data warehousing for something like analytics, seems to be the paths that people are on. There also seems to be a really quite strong... Yeah. The rejection of these proprietary systems, people don't want to be... I think the tide has turned on vendor lock-in.

Iain Stewart:

It seems to be a really, really major shift at the moment, is how do we abstract our contracts enough that there's three or four service providers that could deliver? And how do we future-proof the buildings we're building now to ensure that that multiple service providers can come in and make sure that building's running well, compared to being locked into one?

Kylie Davis:

It makes so much sense, doesn't it? That I loved the way that you were talking about the time and energy that goes into translating data from one source to the next. And how that time can much be better spent on actually genuinely innovating to fix the problems. It's a little bit like the unified Europe, I guess. If everyone's on the same currency, you don't have to spend all this time bloody translating drachmas to pesos.

Kylie Davis:

So, what does the future look like for Exergenics? You've got your funding round coming through, your seed funding coming through. You're looking for 10 staff. Where are you looking for them? What areas are you looking for them in? Developers? Are you joining the ever-growing list of Proptechs looking for developers?

Tim Stewart:

Developers will be key. We've already snagged a very good one, John Christian. [crosstalk 00:36:10] But yeah, as mentioned that-

Kylie Davis:

Don't say his name or people will steal him from you.

Tim Stewart:

I think he's looking for a bit of work, actually. John. [crosstalk 00:36:17]

Kylie Davis:

No, Shh, shh. No, no. You're going to be far too busy, John Christian. You won't have time.

Tim Stewart:

Yeah. So yeah, as mentioned the seed round is the immediate next step. Looking for a million there, we've had 250 committed. It's a good start. And it's only really been open for a couple of weeks. So, having a lot of meetings in that area over the coming weeks. And then, the plan for that capital is essentially to automate everything possible. So we will be looking for a few developers, data scientists, some more optimization engineers. And then, potentially some sales people. Yeah.

Tim Stewart:

And then I guess the theory around the automation is, at the moment, our process, it's a bit clunky. We'll go to a client, they'll have to pull the data manually off whatever the system they're using. So, it might be out of an analytics platform or directly out of the BMS. Pass that data to us. There's then the cleaning process, running it through the model quite manually. Taking it through the model step by step, until we can get to a point where we get those model outputs. And then, hand that report back to the BMS contractor or to the client themselves.

Tim Stewart:

So, that's the process at the minute, but really every step along that way can be automated from our backend. We can have data scientists doing those data transformations and transforming it into a common information model. And then, in and out via APIs, really. So, we'll be looking to build out an API scheme and publish that. And then connect to systems so that we can just get that data flow happening in a hands-off way.

Kylie Davis:

And do you think, having that data, is that going to help BMS systems become better BMS systems?

Tim Stewart:

Yeah, I think that's been our focus, is getting away from that extra hardware piece. And 99% of the BMSs that we deal with, if they're capturing this data, they can deploy the strategies that we're producing.

Tim Stewart:

So, it's just getting more out of your existing equipment. And I think our niche is the ability to find those little bits of efficiency with the modelling that is that, if you don't have a model that goes this deep, it is really difficult.

Tim Stewart:

And it would take weeks and weeks of an engineer's time with a spreadsheet, tinkering and getting as close as possible without making it exact. But I think where we differ is, we take the data, smooth it all. And then essentially, give it to the model and let the model decide what's most efficient for that plant.

Kylie Davis:

Fantastic. Well, look, Tim and Iain Stewart, it's been absolutely fantastic to talk to you today. Congratulations on winning Proptech of the year and also, best in show with Proptech of the year as well. And thanks so much for your time.

Tim Stewart:

Thanks very much for having us on, Kylie. Pleasure to talk.

Kylie Davis:

Our pleasure.

Iain Stewart:

Thanks, Kylie.

Kylie Davis:

So, that was Iain and Tim Stewart from Exergenics, winners of the startup of the year awards at the very first Proptech Awards. Exergenics are right in that sweet spot that we're seeing at the moment within commercial Proptech, that is confirming the value of big data, AI and data transparency to allow both better building management and improved building returns.

Kylie Davis:

And we hear a lot about the proprietary nature of traditional commercial building product suppliers around their data, and the way that that limits building owners and facility managers. And how it's seriously restraining our ability to hit our environmental goals.

Kylie Davis:

The prioritisation of self-interest over a planet we can all live on, is not just bad business, but it's a zero sum game that is seriously depressing. So, it's really refreshing to see how Exergenics has been able to turn around that conversation with traditional suppliers. From being something that's defensive, to helping them see real value in their product.

Kylie Davis:

And that speaks to a second trend that we're seeing in Proptech, where innovations are becoming an inch wide and a mile deep, delivering extraordinary expertise in their specific area. And then making that information easily shared with other apps and platforms.

Kylie Davis:

And the end result is an ecosystem of deep expertise that both inspires and lifts everyone in it, rather than closed environments, where all the innovation comes out of one centralised source. This is great value for us as Proptechs as well, because it makes our innovation more affordable. And it means we can concentrate on what we're great at, rather than having to have a really wide spread.

Kylie Davis:

Exergenics are also one of the new breed of Proptech startups that are showing the real estate and commercial property industry, well, how do we get to a world of smart buildings and smart cities? And what kind of roadmap do we need to follow?

Kylie Davis:

Now, one small correction. In the interview, Tim said commercial properties use 40% of energy in Australia. But in fact, it's actually the entire construction and building industry globally that uses that much energy and contributes to greenhouse gas. But great work, Iain, Tim and the Exergenics team, small but perfectly formed. And good luck with your capital raise. And congratulations, especially on your awesome wins at the Proptech Awards with Proptech Australia, over some extraordinary competition.

Kylie Davis:

Now, if you have enjoyed this episode of the Proptech podcast, I would love to tell your friends, or drop me a line either via email, LinkedIn or Facebook. You can follow the podcast on Spotify, Google Podcasts, Anchor and Apple iTunes.

Kylie Davis:

I'd like to thank my audio support, Charlie Hollands, and the very fabulous Jill Escudero. And our sponsors, Direct Connect. Making, moving Easy. Smidge Wines, exclusive wines made in limited quantities and available only via the cellar door at smidgewines.com. And HomePrezzo, now part of ActivePipe. And helping you make engaging content for email and digital marketing.

Kylie Davis:

Now, if you are a Proptech, make sure that you join the Proptech Association of Australia. It's at Australia's newest not-for-profit association, made up of people who are passionate about the property industry and committed to improving experiences in how we buy, sell, rent, manage, build, design, and finance property. Joining will give you access to events and networks across the country and globally, that will help you promote and grow your business. Go to proptechassociation.com.au, and check out the membership page if you're wondering about the values of membership. Thanks everyone. Until next week, keep on propteching.