Over recent years, we’ve seen a steady flow of mergers and acquisitions in the Prop-tech market, including InfoTrack’s purchase of our leading UK tech business Search Acumen a few years ago. While the consolidation process can be turbulent, property companies and law firms should take heart that this is not the sign of an industry in disfunction. Quite the opposite. It’s the vital signs of an industry in great health as it moves into maturity.
The drivers of market consolidation are threefold and centre around market economics, technological innovation and evolving client expectations.
The nature of technological discovery in tandem with predictable economic drivers all lend themselves towards market consolidation. Tech companies typically start small, applying digital 
solutions to relieve specific human pain points. But, over time, business leaders realise the same underlying technology can be used for a much broader range of applications and they start to scale up. In tandem, market economics start to kick-in with companies that are more successful, more advanced in their growth journey developing the capital reserves necessary to integrate niche offerings to address particular technological gaps, while companies that fail to develop a competitive proposition struggle to keep pace. We can see this process right across the tech industry, from the hyper-active position the social media giants have taken around acquisitions in the last ten years, to the vast portfolios now held by tech goliaths like Alphabet, Meta and Microsoft.
The next driver of consolidation is more specific to the technology industry. The pace of technological change in the last twenty years as we’ve moved at lightspeed from the advent of the internet to the advancing age of AI, has been phenomenal. While other services sectors – legal advice, banking, finance, real estate advisory – rely on norms and standards that remain broadly relevant for decades, the technology sector rips up the rule book on a monthly basis. It is far easier for bigger organisations with greater in-house expertise and access to capital for R&D to stay on the pulse.
The final driver of consolidation is evolving client expectations. As new technology becomes better understood, expectations around what constitutes excellence rise. At the same time, because of how time poor property and legal professionals are in the modern world, a solid technological solution isn’t enough. Service users want significant time savings which means being able to offer a one stop shop which solves a plethora of client issues within a single accessible platform. Once clients move from just experimenting with technology on the margins to wanting to see clear, widespread improvements in profitability and productivity, customer service and user experience become just as important as technological innovation.
So, what does all of this mean for the companies that rely on our industry’s services? My big message is that business leaders should take heart. We have now hit a point where, partly because of the scale we have developed through M&A, we can provide those high-quality integrated end-to-end platforms and these solutions are becoming more user friendly and intuitive by the day, especially as we can now fuel their development through machine learning. Our group is a perfect case study. By combining forces, InfoTrack, with its focus on residential and conveyancing, and Search Acumen with our commercial real estate expertise, have been able to harness technology and knowledge from across our businesses to deliver end-to-end case management platforms that meet the needs of both conveyancers working on single house sales, right up to commercial real estate professionals working on huge portfolio transactions.
This cross pollination of skills, expertise and technology doesn’t just enable us to meet the needs of broader swathes of the industry, but it drives up the quality of the technological solutions we can offer by combining our expertise in AI, digital transformation and sector specific applications of these technologies. In other words, consolidation fosters enhancement of preexisting strengths, not their dilution. Our work side by side with InfoTrack has shown this. This partnership has not led to the erosion of each firm’s unique identity and approach to real estate. On the contrary, our collaboration has generated the synergy needed for Search Acumen to accelerate our pre-existing trajectory and cement our standing as market leaders in real estate digitisation and data supply for commercial real estate lawyers. Meanwhile, InfoTrack has continued its mission to drive innovation in digitising the home moving process. For clients in both spheres, harnessing Prop-tech to deliver clear, tangible commercial benefits and operational efficiencies has never been easier.
What’s next? I think we’re already well down the road to market maturity which couldn’t come at a better time as we face the biggest opportunity in the history of the technology sector – how to understand, apply and maximise the potential of AI. In both prop tech and legal tech, we’ve feasted on innovation for the best part of a decade and if I look at all of those drivers of market consolidation, they remain relevant and will continue to push the market in that direction over coming years. What’s next therefore, is a continued flight to quality which will see further refinement of end-to-end solutions and a revolution in customer service to make the power of raw technology event more accessible and user friendly.
To be clear, this absolutely doesn’t mean there’s no more space for disruptive innovation in Prop-tech. Far from it. Disruption is critical and over consolidation or monopolisation would be as damaging as the hyper-fragmentation of services between niche single solution providers. But, that aside, what we are seeing, which is to be welcomed, is the sector moving from a big bang of startup activity, to a better balance between established industry stalwarts able to operate at scale and disruptive innovation. This is exciting, to be championed, and can only benefit to the businesses we serve across the legal and property sectors.
Andrew Lloyd is Managing Director at Search Acumen
