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This article was written by Daphne Tomlinson, Independent Senior Research Associate at Memoori.

More than 200 PropTech startups are active in Germany. With numbers growing by 82% last year, the German real estate sector is seen as an attractive market for new entrants. Smart building innovators are well positioned within the Manage and Operate phase of the real estate life cycle. According to the Gewerbe-Quadrat.de January 2019 analysis, the Smart Buildings and IoT category lists 41 companies and Real Estate Management accounts for a further 31 firms, together accounting for over 30% of the 226 PropTech startups in Germany.

The digital twin approach, defined as the creation of a digital replica of a physical entity which continuously learns and updates itself, is moving beyond manufacturing applications into building optimization. We have covered the topic previously: Creating smart buildings through digital twins and many stakeholders, not only startups, see the approach as a fundamental game changer for the built environment.

Two recently funded new entrants in the German proptech market, Simplifa and Synavision, are both using the Digital Twin approach in different use cases but with the common goal to improve building performance.

Simplifa, the digital property manager for elevators, was founded in 2013 in Berlin by Ludwig von Bosse, a former Otis sales manager in Germany. Simplifa received seed funding in September 2018 from PropTech1 Ventures, together with BitStone Capital as co-lead investor and a consortium of renowned business angels and existing shareholders.

The company positions itself as a neutral and digital interface between real estate operators and administrators on the one hand and maintenance companies on the other. Simplifa structures, optimizes, and manages elevator portfolios for real estate customers. The startup serves as a central point of contact for owners and elevator service companies and acts as an expert on an equal footing in negotiations. Each elevator undergoes a technical inspection and is recorded in 360° shots to simulate a virtual “elevator twin”. In the event of system malfunctions, the maintenance company can ensure a much faster and more targeted repair thanks to the “elevator twin” without prior dispatch of a technician.

Operating and maintenance costs of the elevators can be regularly reduced by about 30% while maintaining the same quality. In the future, the transmission of sensor data will provide a manufacturer-independent real-time analysis for a predictive maintenance system, which will reduce the manual test frequency of elevators and avoid costly downtime in advance.

Simplifa highlights the tremendous potential for optimization in this large, previously unaddressed market and claims to provide a win-win-win situation for property owners, elevator maintenance companies and tenants. The company already manages more than 1,000 elevator systems today.

The second new entrant using the digital twin approach, synavision GmbH, was founded by researchers of Technische Universität Braunschweig und RWTH Aachen in 2010. Headquartered in Bielefeld, they have been present on the market since 2016, with their Digital Test Bench software, which tests and verifies building performance and accelerates commissioning. With an average payback period of one year, this is an attractive ROI opportunity in buildings.

Synavision received venture funding from BitStone Capital in December 2018. Seed-investor Dirk. U. Hindrichs stated: “After showing the demand for cost-effective quality management in more than 250 buildings, the investment of BitStone Capital will help us to establish synavision as a brand for quality management and to roll out the software on a large scale.”

With its software-as-a-service platform, Synavision’s Digital Test Bench creates a digital twin of building automation functions and tests them in commissioning and operation. Owners, engineers, contractors and operators receive detailed and transparent evaluations of the building performance. A recent case study at Stuttgart Airport resulted in a savings potential of > € 25.000 in less than 4 weeks.

synavision is also involved in the QUANTUM project funded by the European Union within its Horizon 2020 research and innovation program. The project supports the development of information and communication technologies for buildings to reduce their gap between intended design and real performance in operation.

PropTech1Ventures, Germany’s first venture capital fund specializing in European PropTech startups, considers the German real estate sector a “sleeping giant” in terms of digital innovation. After decades-long reluctance, the sector is now confronted with sustained transformation due to disruptive startups and digital twins may well be the catalyst for this transformation.