Another Day, Another Deal: Consolidation In Real Estate ESG Software Vendors Move Market Toward A Future ‘One-Stop-Shop’

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Another Day, Another Deal: Consolidation In Real Estate ESG Software Vendors Move Market Toward A Future ‘One-Stop-Shop’

Hot off the heels of a successful Series C funding round in March, ESG data management and reporting platform Deepki snagged UK-based real estate energy efficiency and sustainability software firm Fabriq on 28th June 2022. The acquisition aims to build out Deepki’s ESG offering by incorporating Fabriq’s energy efficiency capabilities and expanding its reach into the UK market. 

Tightening regulations and reporting requirements are driving ESG data collection and management strategies among real estate managers. Vendors are finding early success in implementing investor-grade data management solutions, replacing manual input excel spreadsheets with digitized reporting. This is just the start of a longer journey, a mere pit stop along the decarbonization highway. 

Buildings must decarbonize rapidly in order to reach net zero by 2050. This equals a 45% reduction of energy consumption per square foot from 2020 levels by 2030, according to the IEA. Investors, and pension funds in particular, are putting pressure on the real estate sector, creating a massive opportunity for decarbonization and energy management products, software and services. But the costs of doing this can appear prohibitive. 

The race is now on for point solution vendors to develop comprehensive, cost-effective platforms that will deliver net zero to firms’ real estate portfolios. The Deepki deal was the latest in a series of similar acquisitions at the intersection of ESG and PropTech, as firms look to develop a more complete offering that provides both ESG reporting, and energy management and decarbonization functionality. In just the past year, Measurabl acquired Hatch Data, Conservice bought Goby, and IBM took over Envizi. These reflect the need for consolidated solutions that can tackle the multifaceted challenge of ESG in real estate. 

Verdantix expects further consolidation of software vendors and service providers to continue. As the meaning of ESG for real estate becomes clearer, the market will demand all-in-one solutions that address the ESG reporting and regulatory piece, energy efficiency, and decarbonization, among others. Evolving regulations and industry standards will force a focus on product innovation and the economics of solutions that can address all facets of the ESG agenda.

Ben Readman

Analyst, Smart Buildings

Ben is an Analyst in the Verdantix Smart Buildings practice. His research agenda currently focuses on new strategies for corporate energy management and future trends in carbon offsetting markets. Ben Joined Verdantix in 2021 having previously worked as a researcher at CECAN. He holds a Masters in Environmental Strategy from the University of Surrey and a BA in Geography from the University of Birmingham.