Full transcript: Allys Todd — ValAi: why energy efficiency is the next valuation battleground

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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. It's so great to have you here and to share stories of innovation and opportunity across real estate, property, and building services. And the aim of each episode is to introduce listeners to a PropTech innovator who is pushing the boundaries of what's possible across how we design, build, buy, sell, rent, and invest in property, and all of the associated behavior and activities around that. Now, none of this would be possible without our sponsors, so a big shout-out to the Direct Connect team, making moving easy; Dynamic Methods, the innovators behind the Forms Live and Realworks Forms; and the PropTech Association of Australia. Thank you for your support of the podcast. Now, we're all familiar with the idea of adding an extension or a pool to increase the value of our homes. But what about your home's energy efficiency, or lack thereof it? We are moving into a new era where the energy efficiency and carbon credentials of your home will soon play a significant role in how much your home will be worth. And my next guest, Alice Todd, is the co-founder and CEO of a PropTech helping homeowners and property industry professionals as this becomes reality. Val AI is a new startup whose AI is able to help valuers, financial institutions, and insurance companies understand the climate risk inside their residential property portfolios with a complementary product that provides the data and insight to homeowners to understand what they need to do to make their home more energy efficient, and the payback they can expect when they take action. And with the large majority of Australia's existing residential housing stock rated only two stars out of an expected seven for energy efficiency, upgrading our existing homes to make them more energy efficient and affordable to run is going to play a huge role in helping Australia hit our climate and carbon reduction targets. So here to tell us all about it, Alice Todd. Welcome to the PropTech Podcast.

Allys Todd: Thanks, Kylie. Great to be here.

Kylie Davis: Yeah, lovely to have you here. Now, quick question, always the hardest one is our first one. What is the Val AI, uh, elevator pitch?

Allys Todd: Sure. At Val AI, we make home energy efficiency simple. So we were built to improve the confidence of home improvement decisions so that Australians can save money and build wealth while they're helping to protect the planet.

Kylie Davis: Fantastic. Okay. So this sounds like PropTech saving the planet, all right, which, which I, I love, and I... This is such a growing and, um, emerging piece of technology. How did you come to get into it?

Allys Todd: Yeah, certainly. So I'm a co-founder. Um, a, uh, my s- my co-founder, Tom Reed, is a property valuer. So he was working within the space of, uh, property with banks and insurers, providing that market value and detailed assessment on individual homes. Um, and he saw a real gap in the market where, um, those groups that are looking for data insights really had a lack of knowledge when it came to the sustainability and the energy efficiency metrics, which currently in Australia today aren't actually linked to the market value of residential homes.

Kylie Davis: Yeah.

Allys Todd: Um, so he was actually working as a, a tutor at a university, and he found that all these wonderful, empowered graduates that were coming out into the space of property and valuation really weren't considering anything win- within the sustainability or energy efficiency space. And certainly, carbon footprinting of homes was not even something that is a topic at a university level. Uh, so I came in because my background is in climate impact and, uh, earth sciences. So I've worked in the sustainability space for many years, particularly within the area of, of policy. And, um, I was really, really interested in being able to tackle, um, the need for us to be having energy efficiency metrics on our homes embedded in our economic system. So of course, that means not only working with government but also engaging with and inspiring the corporate entities, the banks and insurers, to start really taking this serious in their transition and their net zero targets.

Kylie Davis: Yeah. So we know this really is a thing because the CSIRO have been working on the, what I think has the working title, the NATERS rating or whatever it is, which I couldn't even tell you what that stands for. But, but residential energy efficiency rating system. And I... How, what more do you know about what's coming through the space?

Allys Todd: Yeah, certainly. So, um, for many, many years, there's been some good decision-making at a federal level and government level here in Australia about making sure we can define the sustainability and energy efficiency metrics of homes. Um, what we are seeing though is that hasn't converted in Aussie Australians, the moms and dad consumers, um, in actually introducing these concepts into their financial decision-making.

Kylie Davis: Yeah.

Allys Todd: So that's where Val AI comes in. While it's great to be able to have metrics that, uh, large corporates need to report, either to their board or under mandatory disclosures that are coming i- in Australia in the future, um, what's more important is how can we then use that data to really trigger positive behavior change at an a- asset or at a home level? And of course, that in- includes needing to engage the person who's living and residing in the home in understanding this process and why they can benefit from it, so that they can then inform their bank insurer and ensure they're getting the best possible deals available to them to help them with this transition. So when we talk about decarbonizing our economy, um, for us, Val AI are really focusing on that 19% of the carbon emissions that we have in Australia at a total, and they sit within homes and residential assets. So there's enormous amount that can be gained by us as a country if we start looking within the home at ways in which we can decarbonize. And we truly believe that because of the embedded trust that you have with banks and insurers and those people you align your own personal dollars with, we see that there's an excellent opportunity for banks and insurers, through our data technologies, to help engage the consumers, to support them, and also incentivize what actions we all need to do to get off gas, electrify our homes, and make sure we are getting the best products and services from those corporations.

Kylie Davis: Fantastic. So how does the Val AI solution work? 'Cause like a couple of weeks ago I interviewed, uh, Sonja Mak- Markovic from Evertap, and they're, they're playing in this space too, but I'm, I'm curious to hear what, how you guys are approaching it.

Allys Todd: Yeah, certainly. So we really, uh, have a slick UX UI that we've built with the support of Amazon's Innovation Advisory service. So, uh, about 12 months ago we won the Global Open Finance Challenge. That gave us an opportunity to have a sandbox of data sets from five global banks and their retail consumers to look at ways in which we could use novel data to help incentivize action. Um, so for our product itself, it's one where our machine learning algorithms and our data insights, um, are used with a tool within the home. So we engage at either a consumer level or if you are a in-home assessor or real estate agent or a valuation professional who works in the industry, we have products or platforms that engage you at your level. So there are various ways in which people can ingest data into the Val AI platform, and then we make those data insights available to you either as a dashboard of information comparing you to other consumers or others within your network, um, or as an actual report that you can take to third parties. So for us, our, uh, corporations and those that we engage with are, are the banks and insurers, so they are our customers. Um, there is a Victorian insurer that's very well known we're working with at the moment where they're looking at their in-home assessors who are taking and deploying our product when they are in the home already in order to give new insights to consumers, and ideally be able to educate, uh, and uplift those consumers so that if they are making changes to their existing houses, they can have a climate and also an impact lens on what those decisions are they make in terms of retrofits.

Kylie Davis: Right. Okay. So what does this product in look, in my house look like? What does that... Is it something I... Because one of the, uh, we're currently looking at solar panels for our, our, the roof of our property, and ha- have had a really big learning curve around that, but one of the things that has been quite painful is the find all of your invoices, work out all of your devices, and try and... It's like, oh, you know, a bit busy this weekend. How long is this gonna take? So how does, how does your side of it work?

Allys Todd: Yeah, Kylie, look, you're not alone. Um, what we've built is we've built a digital platform that you can either, either use as, uh, a white labeled product that will seamlessly integrate into a banking or insurer's process. So if you're already a banking customer with a slick app, um, that's where you would see our product deployed. Um, we also have a platform, Home Efficiency Australia, that if you'd like to take advantage of a self-assessment for free right, right now-

Kylie Davis: Mm-hmm

Allys Todd: ... you can. We call it the, uh, Home Efficiency Australia Digital Home Health Check. So it takes between three to five minutes. As long as you have internet connection, you can log in. It allows you to search your property, put in some novel inf- information about the inside of your home, and then we also validate, get that against a range of other data sources to do with your climatic zone, your location aspect, open aerial imagery analysis regarding various assets, parts that you have on your house. Um, and then what we do is we utilize that to give you your own personalized insights. So that'll include what your energy efficiency score is for your property, uh, include your current market value and your sustainability rating, um, similar to the NatHERS rating. Um, and we'll also show you what your carbon footprint profile is based on the energy that you're using at the home currently. But what's more important is we give you that data compared to other Aussies, so you know how you stand compared to the lay of the land. Um, and then we have a recommendation engine. So we say, great, now you know some baseline information at a very low level about your house. Here's what we think are the best home improvement upgrades you could make now, um, that can increase your scores and save you money, and we give you all the ROI data and, um, information regarding rebates and incentives to help you. So while we don't trigger the tradie coming to your house and putting your solar panels on your house, Kylie, what we do see-

Kylie Davis: Yep

Allys Todd: ... is look of, of the 25 things you could be doing, based on the data on your exact home, these are the best things that you should start with to start your decarbonization journey.

Kylie Davis: Okay. Awesome. So you've mentioned a couple of times this word novel data. What is novel data?

Allys Todd: Certainly. So we're talking about the in-home information that isn't-

Kylie Davis: Yep

Allys Todd: ... available, um, to us through, uh, open source or other data sets that we might have. So, um, if you can imagine with a home, you can go to places like realestate.com right now-

Kylie Davis: Yep

Allys Todd: ... and you can see some really infant, you know, good data sets on a particular house if you're looking to purchase or rent it. Um, but what isn't included in that is some detailed assessment on the actual livability score and wellbeing score of your property, and that's the information that we, um, obtain by you completing a self-assessment or by one, one of those professionals coming into your home that use our technology product to be able to capture that data. And of course, that data changes, which is why we call it novel data, depending on your personal home and habits and the lifestyle that you have.

Kylie Davis: Yeah.

Allys Todd: So if you imagine a house at tea, uh, at, uh, Keyton, um, they may all look like the same house on the same street with a new development, but of course, and it's not until you put the actual person and family into that home that you have a better understanding of the actual data energy use and of course the carbon profile changes depending on all the things you like to have in your own personal home.

Kylie Davis: Yeah. And how many seven-year-old boys you have who leave the lights on constantly. Yeah.

Allys Todd: Exactly right. Yes.

Kylie Davis: I don't have seven-year-old boys anymore, but it was a thing. Let me ask you a question. Are you happy with your current operational workflow? Are you really satisfied with printing, signing, scanning, and emailing contracts, and then having to wait days for them to be signed and returned? Well, I didn't think so. And I have some good news. There is a better way. Dynamic Methods is the team behind leading real estate industry tech platforms such as FormsLive, REI FormsLive, and RealWorks. With a mission to make better happen, Dynamic Methods are dedicated to providing efficiency and productivity tools, boosting form technology to real estate agencies across Australia. Each month, 50,000 real estate professionals across 8,500 agencies from every Australian state and territory use Dynamic Methods form technology, empowering more than 7.2 million transactions a year. Dynamic Methods is also proud to host quality integrations with some of the PropTech industry's most powerful technologies, such as DocuSign, Secure Exchange, Equifax, and more, putting everything you need to get forms and contracts filled in, signed, verified, and exchanged into one easy platform. So if you're ready to ditch the pen and paper, make your agency look more efficient, head to dynamicmethods.com.au/partners to learn more. We know that, look, there's talk of climate crisis every single day. Um, we've all got stories, um, a- around issues with weather, f- bushfires, things like that. But how, how... L- let's, let's actually grab some insights into how big the data and how important it is that we go down this path and start to understand the energy efficiency of our homes and improving it.

Allys Todd: Yeah, certainly. So in Australia, to keep it hyperlocal, 78% of homes that exist today were built before energy rating standards existed.

Kylie Davis: Yeah.

Allys Todd: So the majority of homes in Australia don't have an energy efficiency score or are really, really low inefficient properties.

Kylie Davis: Yeah.

Allys Todd: Now, when it comes to our transforming and decarbonizing of Australia and our transition economy, it doesn't make sense for us to look to bulldoze and build new everywhere.

Kylie Davis: Yeah.

Allys Todd: That's simply not feasible. What we do need to be doing is looking at doing some uplift to those homes to ensure they're livable into the future. So, as you've said, when we look at global scenarios when it comes to the warming of our planet, we know there's some significant impact that's going to be happening, and we're already seeing it today in Australia. Um, what we aim to be able to do i- is provide you with simple, affordable ways you can uplift those properties and future-proof them for the future. The reason we engage with the banks and the insurers is because they are underwriting or responsible for those assets because they're sitting on their, on their insurance or bank portfolio. Um, uh, we know from working with groups such as the World Energy Council and, um, reinsurers like Munich Re, the future global scenarios forecasting that has been done says that there are many homes globally that may become stranded assets or become uninsurable in the future.

Kylie Davis: Yeah.

Allys Todd: So this is about us providing qualitative data insights to our customers now so they can make smart decisions on how they're going to continue to keep and maintain their customer base-

Kylie Davis: Yeah

Allys Todd: ... and what they should be providing their customers, that's you and me, to ensure that we maintain our customer, um, engagement with that particular company. And of course, this is about holding ourselves as consumers, but also those groups who are supporting us, like banks and insurers, accountable for what we could be doing together to transform our homes and maintain our security and our wellbeing, uh, in the face of climate crisis.

Kylie Davis: Yeah. So what... Th- because we're seeing things like green loans coming out, too, and what I'm curious to understand o- or what I'm curious to just kinda lo- dive into a bit deeper on is this link between, this is where big gets little and little gets big, right? In that federal government is driving climate policy because a- as a country, we've signed up to, um, you know, to make- we've made commitments to things. Um, but if we don't get this right at a grassroots level, you know, well, banks are basically being directed at federal level about their carbon policies and what they need to be doing in terms of green. And so this really does have to wash down through the system into, into, into grassroots level so that we're all doing our bit.

Allys Todd: Yeah, certainly. So when it comes to, um, our net zero targets, um, we need to have more than one horse in the race. So there know- needs to be multiple actions that are at play at different levels. Um, what we are also seeing is there are incentivizations that are being put forward. Um, we're seeing that working really well with the Inflation Reduction Act in the US, particularly in, in boroughs like California, where they're seeing that the best way to uplift, um, the performance or energy performance of homes really is about cash incentivizations and things that can be done. So one of the best ways that we can trigger incentivizations from banks or insurance perspective is the ability to have green loans or offerings that are available depending on your risk profile, essentially.

Kylie Davis: Mm-hmm.

Allys Todd: Um, what does that mean for the consumer? Well, um, it's about having some really good policy about ensuring, and this is goes to Valai's mission, that no home is left behind in this transition, and this is about a just transition. So we can't be focusing simply on just building for the 1% who can afford it-

Kylie Davis: Yeah

Allys Todd: ... that eco home that meets all the sustainability requirements. This is about ensuring that the uplift call, uh, applies to every member of our society, regardless of their financial background. Um, so for us, it's about incentivizing banks and insurers with the data they need in order to trigger new opportunities for them to support their customers. And of course, they are under regulatory compliance obligations already. But as you've mentioned, there are new mechanisms in which they will need to be reporting on their risk. Um, and that includes carbon and climate and also to their shareholders. Many are and have been getting their housing order. They have some really good, meaningful targets that they've said by 2025, 2030, 2050, they will achieve. Um, we're now at that critical juncture where in order for us to meet those targets- At scale and at pace, um, the next 12 to 18 months is critical, um, for us as a nation to start deploying multiple solutions in order for us to be able to decarbonize.

Kylie Davis: Yeah. And, and I'm fascinated too by the fact that you guys are coming from that valuation space. So let's just unpack that a little bit, because at the moment, the way properties are valued is, you know, where they're located and how big they are and how many bedrooms and, uh, you know, the, the materials and, w- well, m- brick versus, you know, weather board or whatever. It gets a little bit limited. Is... There isn't a consistent set of data features that we all agree equal energy efficiency. Uh, what's the need for that in that, in this space?

Allys Todd: Yeah. Well, um, I think as a consumer, um, we really should be at a point whether we are a renter, investor, or an owner of a property, that we can make our financial decisions, including data on the livability of that home.

Kylie Davis: Yeah.

Allys Todd: And that includes, um, when I'm considering somewhere to purchase or rent, it would be really nice for us to be able to know data such as what's the current occupant's energy bill or energy profile. How much does it cost to not only-

Kylie Davis: To see

Allys Todd: ... maintain a mortgage on this asset-

Kylie Davis: To see

Allys Todd: ... but how much does it cost to live here?

Kylie Davis: Yeah.

Allys Todd: Um, and that's gonna be really important, um, with the cost of living crisis that we're entering now. So just even essential elements like that are missing currently from the profiles, as you've mentioned, um, in the way we look at the value of residential assets. So for us, um, when we did a cross-market check on the, the valuation sector, um, we really looked at what are those essential pieces of data that are missing in order for us to be able to deliver this value, not only to the community, but to those groups that service. And, um, our product through ValAI, the digital home health check, allows us to collate and collect that data, which can then be extrapolated. So as policy may change in the future regarding what is the sustainability rating score or the energy efficiency score or what- whatever it may be into the future, we're collecting those data sets now and can infer information that will be relevant to the consumer. Because ultimately, it is one thing for us to be collecting this data for board reports-

Kylie Davis: Mm-hmm

Allys Todd: ... it is another thing to be able to be using this for environmental and behavior change in order to trigger those actions we need, need to do.

Kylie Davis: Yeah. So do you see us getting to a point... Well, we know this from g- the commercial sector, right? Because the NABERS ratings has been in, in place in commercial since, what, the late '90s, I think, and Australia pioneered that. And we know now down the track that, uh, the higher the, the sc- the, the, the energy efficiency of the building, the better the rents are and the, and the better quality of tenant. How long do you think it's gonna be before we start seeing the valuation of property starting to rise or, you know, fall on the, on the energy efficiency scores that they're, that they're getting?

Allys Todd: Yeah. Um, not soon enough for our liking-

Kylie Davis: No, no.

Allys Todd: ... when it comes to it. But the reality is-

Kylie Davis: As we head into a bushfire season. Yep.

Allys Todd: Yeah. Look, I think, um, commercial space is a really great space to look at, um, because of the successes that it's-

Kylie Davis: Mm

Allys Todd: ... been able to have. We have digital twins of property now. Um-

Kylie Davis: Yeah

Allys Todd: ... that's very, very normal in the commercial space, and it in- it allows people to make really critical decisions based on those good data sets. Um, we absolutely could be working towards that within the residential space. Um, there's sort of two horses in the race, right, Kylie? We have new builds, and the-

Kylie Davis: Yep

Allys Todd: ... policies that are around what we can and can't build here in Australia, and absolutely we are living in tents. Um-

Kylie Davis: Yeah

Allys Todd: ... our standard compared to the rest of the world, really we are lagging behind, so there's much we could be doing there to have better quality assets being built from today forward to meet those energy efficiency standards and, um, ensure that livability is there for all profiles in our community, not just the 1% that can normally-

Kylie Davis: Mm-hmm

Allys Todd: ... afford it. Um, but for ValAI, we're really here to, um, provide those data sources for existing residential assets, and that's where, um, there is complexity in the market-

Kylie Davis: Mm

Allys Todd: ... because, um, we need to ensure that we are always looking at up- uplift and retrofit, but of course, it needs to be something that, because this is, um, your home, your castle, you need to be engaged in this action in order for you to make it relevant. So in the commercial space, NABERS has been highly efficient and effective because there has been regulation about, um, how we utilize it. I think within the retail space, what we are now looking for is really key actors to be able to stand up within the corporate space and deliver really good storytelling on how houses have been uplifted, the benefits, not only social and economical, but the wellbeing elements that are associated. Um, that's when we're really going to have a tipping point where people as consumers can start demanding this, this information from real estate agents-

Kylie Davis: Yeah

Allys Todd: ... or from, um, large websites that might be advertising these properties for sale. Um, there's no reason why without, um, the use of tools like ValAI's, we can't get to a point where it is standard for us to know, um, all of the asset features that actually matter for us from an intrinsic perspective rather than just the bricks and mortar.

Kylie Davis: Yeah.

Allys Todd: Because, um, if we are gonna be facing the next 10 years of climate crisis and the changes that we're going to be seeing with heat and temperature, um, we should be considering these things when we're making any asset purchases as well.

Kylie Davis: Yeah. But we're quickly moving into a future where it's not just, uh, the street that you're on or the beds- the bed, bath, and car spaces, but actually you're looking at what the, what that energy rating is as part of the, as part of the important, or Miele appliances and, and European kitchens. That, like, these are not necessarily the things that we should just be making decisions on. What, uh, do you see, do you see, Alice, that, it, we're getting... I mean, I've talked to property, I've got a, um, presentation coming up with property investors and, uh, and, uh, you know, of, back in the day, the, the renovator's delight was a knockdown rebuild or, you know, like a, a home from the 1800s or, or, or 1920s or something that you could get into and, and restore. Do you think we're gonna be in a, in a future where the renovator's delights are actually low-efficiency homes that have got the opportunity to be turned into high efficien- or higher efficiency homes? From evaluation perspective?

Allys Todd: I mean, it's... Yeah, look, incentivizations are the real trigger point there. Um, if we have really good economic policy, if we have banks, insurers, and others that are there to support people who are willing to take that risk and, and do that work, um, then we will be able to see uplift happening much quicker. Um, in addition to that, gosh, it's all about a cost-benefit analysis really, isn't it?

Kylie Davis: Yeah.

Allys Todd: Um, at the moment, everything is based on the dollar figure as opposed to the emotional or the wellbeing figure. Um, it would be nice to see those e- elements brought in. What's important is from the data to date, um, homes that have been uplifted, those that still have those character features but those that do have good energy efficiency ratings, they are actually getting 5 to 10% more return when it comes to salability. So it does make good economic sense for us to be investing in those current assets, but also making them future-proofed as well.

Kylie Davis: Yeah. So I also have a theory, a hypothesis, that if you're thinking about upgrading your home's energy efficiency, do it now before these ratings come in because there is going to be a supplier crisis once, o- once everybody realizes that their homes are kind of two or maybe three stars if they're lucky, if they've been living in them for a while. What's your thoughts around that?

Allys Todd: I can't agree more. And, um, I think, you know, we have-

Kylie Davis: This is why I'm looking at solar right now.

Allys Todd: Yeah. We need to make this simple, right? The more we put, um, harbors or incumbent, um, steps and, um, you know, things that we need to do or hurdles we need to get through to participate in this, the less Australian consumers will be motivated to participate.

Kylie Davis: Yeah.

Allys Todd: So I think the biggest thing is the more simplicity there is in the way that you can access information that's relevant to you and make good informed decisions yourself, um, the more chance we have of, um, triggering those actions we wanna see happen. Um, that's our why. Um, for Val AI, we wanna be able to reach a million homes. Um, for us, that could mean if we turn something from a two or three-star asset, and then it's, uh, you know, to a six or seven-star asset, which is just the baseline of what we wanna see moving forward, um, that can save Aussie consumers up to $825 million in energy bill savings.

Kylie Davis: Wow.

Allys Todd: And that also means up to four gigatons of carbon that we've avoided. So these are big steps that can happen just by, um, some minor upgrades that can be go- done to homes.

Kylie Davis: Yeah.

Allys Todd: So, um, for us at Val AI, it's about simplicity and making sure those data insights are in the hands of those decision-makers, both the corporates that we engage with, but also their customers, so that you can feel like you're a part of the journey and you're building a level of trust in why you're making these decisions when it comes to your, for some people, your biggest asset, your home.

Kylie Davis: Yeah. Well, for, for most people, right? Um, 1%, the ones that are lucky enough to have other assets that are bigger. This episode is sponsored by ezypay. ezypay makes collecting proptech payments easy. As one of Australia's leading subscription payment providers, ezypay is helping real estate and proptech businesses to improve rental collection rates, transform arrears management, and increase cash flow. Built for integration with a focus on partnerships, ezypay's platform works seamlessly with your existing proptech software, giving you access to industry-leading features that enable complex billing and settlement to support trustless business models. Discover the power of payment automation and leverage one of the first platforms to enable the pay-to payment solution at ezypay.com/proptech. So what's your business model? Um, you mentioned before that you're white labeling, Alice, but, but Home Efficiency Australia, is that how much... Is, is there B2C cost or what? How do you work?

Allys Todd: Yeah, certainly. So, um, we are a B2B company primarily, so we work with those bank and insurance customers who are looking to be able to utilize our, our platform to be able to inform their decision-making. Um, we also have Home Efficiency Australia. That really has been, for us as a startup, a really exciting testing bed to be able to showcase what our product can do and also gain real-world user testing with Aussie consumers. Um, certainly, we have two platforms that are available, those for self-assessors, so, um, consumers to be able to use, and those for, uh, those professionals to be able to activate. The professionals have worked with, um, major valuation firms and others around Australia, um, to be able to make sure the platform is usable and functional for them and works within their current systems. Um, but when we're talking to consumers, it's really important that we get the messaging right, um, that it's accessible to all, um, and that there's no barriers to them wanting to participate, one, in using a, a digital tool online, but also most importantly, providing confident, accurate data. And so that's why Home Efficiency Australia is there. And it gives you the opportunity to try before you buy, so to speak, and get some really important information. But it's also a demonstration product to our B2B customers to, um, on the value that you can get. So, um, if you are working in, in a bank and you are interested in working with Val AI, the most important thing is we are not going to make you jump through other hoops in order to get access to our proprietary software technology. We have a demonstratable product right there that you can use yourself in your own home so that you can understand it intrinsically before you look to be able to act on it within your enterprise sales cycle, because we know those things do take time.

Kylie Davis: Yeah. Fantastic. So, so what of the... How long have you guys been going for, uh, Alice? H- what's the, how big is Val AI?

Allys Todd: Yeah. So we've been around for two and a half years now, so we're still very young as a startup.

Kylie Davis: You are a baby. Yes, okay. Awesome.

Allys Todd: We're a... We are a baby. Uh, we're growing slowly, so-

Kylie Davis: That's a good thing

Allys Todd: ... yeah, we brought in some investment capital last year, and that allowed us to grow our team from two to five.

Kylie Davis: Mm-hmm.

Allys Todd: Um, and at any one time, in addition to that, we have five to seven interns that support us as well. Um, so we are a baby, but we're growing. Um, we're based in Adelaide and Sydney with some staff in Melbourne and Brisbane. Um, so we are really Australian-based, looking to be able to upskill and uplift. But, um, in terms of our impact, we are impact-driven as a company. My co-founder and I, we did cr- quit. We're not, uh, babies ourselves. We did-

Kylie Davis: No, no.

Allys Todd: ... you know, quit other careers, um, with a real need to be able to give back. So we are 1% for the planet as a company. Um, we are carbon neutral and going through our Climate Active certification at the moment. Um, and we also live by a means of including gender equity as a major focus for us as a company. If we are going to build something that adds value, we wanna make sure that adds value to our staff as well. Um, so, uh, we do spend a lot of time with interns and others, um, gender and gender-neutral identity people, to ensure that everyone has a, a voice in the Val AI team and we're growing it productively, as well as, um, being a good corporate citizen.

Kylie Davis: Fantastic. Fantastic. So what are the biggest challenges that you guys have, that you've had so far in your two and a half years?

Allys Todd: Um, any startup that's listening is just gonna be sweating-... thinking about this, because we all have challenges. Um, I think access to good, um, technical capabilities here in Australia can be a real squeeze on, from a price point perspective.

Kylie Davis: Yeah.

Allys Todd: Um, i- if we all had a magic ball, we all would've become machine learning engineers 10 years ago-

Kylie Davis: Yeah

Allys Todd: ... because the capacity for them is really stretched. And for startups, it's very, very difficult to find enough capital to have those kind of expertise in-house all the time. So that has been, um, one of the, one hurdle for us to be able to, um, have a good team at a price point that we can afford. Um, one of the other hurdles I think we've had is, um, when you look at the landscape of working with corporates, um, particularly B2B, um, they're very big beasts. So I think, um, we've learned a lot of lessons through our own ground truthing of when we are going to work with new customers. Um, asking the right questions, getting to the right person within the team, and shortening those enterprise sales discussions to make sure that it's a win-win for both groups, and that we are able to, um, ensure capital is deployed quickly. Um, because for us as a startup, um, it's better that we iterate on, you know, ongoing sprints and continue to further our product development, um, rather than getting stuck, um, in long, uh, development cycles that may not result in, in customers, um, at the end of it. So, um, for us, we like keeping it lean and agile. We like working with people that are happy to throw a bit of spaghetti at the wall and see what sticks-

Kylie Davis: Mm-hmm

Allys Todd: ... because, um, through lots of failures, you quite often get the better results. So we'd rather be able to share failures with people who wanna iterate, um, and get good results in the end, rather than just, um, build for building's sake.

Kylie Davis: Yeah. Fantastic. So, so Alice, what's your... W- I mean, you mentioned before about a million homes in the platform, but what are your goals for the next couple of years? What's on your roadmap? What have you got coming up?

Allys Todd: Yeah. So, um, we, we do have a five-year, um, plan as, as startups, whether that be an exit or acquisition, that's always on the cards. But ultimately, our vision is to be able to show quality metrics on how our data has helped with our decarbonization. Um, to put it into perspective, um, in Australia, a million homes, um, that is a, a three to five-year journey, um, that should repl- you know, will, will convert relatively quickly, but allow us to continue to engage with those householders, um, on their journey so we can continue to track their decarbonization over a five-year period. Um, in context, if we were to deploy in Southern California, there are more homes in Southern California than in one state in this country.

Kylie Davis: Yes.

Allys Todd: So it really is about our go-to-market plan and where we could be, um, reaching and, and, you know, supporting, um, the most that we can. Um, so we're certainly looking at, um, other classes in other areas of, of the globe, particularly the US because of their strong economic pil- policy and also similar types of h- homes and similar structures in the way in which they do business. So, um, for us, new market expansion is definitely on the horizon, and we're also looking at some really important strategic partnerships so we can reach as many people and deploy the capital those individuals need in order to uplift their homes.

Kylie Davis: Awesome. And so when you look at the... Well, so when you look at this space, there's kind of quite a few emerging PropTechs popping up in the, in the decarbonization and the residential real estate space. How do you, how do you see the lie of the land?

Allys Todd: Yeah, I, um, with anything to do with decarbonization, as I mentioned, we need more than one horse in the race-

Kylie Davis: Yeah

Allys Todd: ... because not one size fits all when it comes-

Kylie Davis: Yeah

Allys Todd: ... to Australian properties and our decision-making. Um, so I welcome the opportunity for there to have multiple, um, scenarios there because it means we will, um, have a better shot of actually being able to deliver. Um, what I am seeing, which is of interest, is the need for us to have, um, those that are supporting from a data insight perspective such as ourselves, but also the importance to have marketplaces and others that already have good customer bases and trusted loyal, um, members who can, uh, incentivize. 'Cause we know that with behavior change and that, that need to be able to do things, particularly with your finances, you need to be supported and trusted, and you need to have people there that are your, um, you know, mentors or others that can support you in the journey. Um, so very, very happy to see, um, others be- being involved. I think if we didn't have any competitors, you would be questioning whether this is a real go-to-market option for a startup.

Kylie Davis: 1.0.

Allys Todd: That's right. So, um, the more we see good PropTechs c- coming and starting up within the decarbonization journey, I think, um, it, it means we're in a good firm position to be able to achieve some, some real value.

Kylie Davis: Yeah. And how, how do you see real estate agents should be using your technology or-

Allys Todd: Um, we, yeah, we are definitely, uh, working with real estate agents at the moment. So we have a subscription as a service product or a SaaS product that they can use today. Um, we've found that, um, through our user testing and those that are currently using it, it really does provide some unique uplift, particularly in real estate, uh, for professionals in order for them to increase the saleability, the turnaround. And even within the rental space, being able to deliver those insights to help make decisions, either to the owner who needs to uplift the property in order to get better rental returns or better saleability, and also for those people that are looking to rent the property or purchase the property. Um, by upskilling real estate agents, it's giving them a new market advantage, and we're really excited about that product. So, um, real estate agents can actually visit valeai.com.au today and subscribe to our SaaS. We have individual accounts, but we also have team plans. So if you have an entire agency who's looking to be able to get behind this and deliver a report either to the professional, but also to have something there at time of visit or inspection, um, that's a service that we provide today.

Kylie Davis: Awesome. Fantastic. And so Alice, what's your, uh, what's your view on what the next couple of years is g- Going to be like in terms of climate. Do you think we can do this? Can we turn the kinda, can we turn this, um, climate catastrophe around?

Allys Todd: Um, I think there is measurable intent. So I had the pleasure of being at COP27 in Egypt, um, last year for the UN Climate Change Conference. Um, while there is political spin, um, there is serious intent and capital. So we do have the capital available to be able to deploy the technal- the necto- the technologies at scale-

Kylie Davis: Yeah

Allys Todd: ... uh, globally. Um, what the secret sauce is, is the pressure on internal households to participate in this process. So I think that's where that community action-

Kylie Davis: Yeah

Allys Todd: ... and collaborative action is really quite important. Um-

Kylie Davis: Yeah

Allys Todd: ... I think all of the seeds are in place. It's a matter of bringing everybody along for the journey, um, which is what we're going to see. And already Sydney today, um, I heard that it was nearly 30 degrees, which is re- or 36 degrees-

Kylie Davis: It was 35 degrees yesterday, and it has been all week.

Allys Todd: What-

Kylie Davis: Yeah.

Allys Todd: Yeah. Um-

Kylie Davis: September

Allys Todd: ... the more, yeah, the more we keep seeing these types of triggers that are showing us that the climate is changing, the more extreme weather events that we see, unfortunately we will be at that point where, um, we have to take action. So the more, as you've said about your solar panels, the more you can start becoming involved in the dialogue and educating and uplifting yourself on decision-making now, um, the more you'll be able to fut- proof yourself, and you won't be demanding at the last minute whatever option is left in the supply chain.

Kylie Davis: Yes. Yes, very true. Very true. Yeah, so you heard it here first, everyone. If you are thinking of upgrading your home, and we strongly encourage you to, act sooner rather than later, 'cause there may be a bit of a rush to the, to the door as, as these things become more and more, more standard. Um, Alice, it's been absolutely fantastic talking to you today. Thank you so much for sharing everything about, uh, Val AI and Home Efficiency Australia. We're gonna include some links in the show notes so that people can, uh, can find you really easily. I am going to sit down with, um, my husband, and we're gonna do the Home Efficiency Australia thing to make sure that this decision we're making around solar panels is the right one, although we're 99.9% sure it is. Um, but thank you. It's been an absolute pleasure talking to you today.

Allys Todd: Thanks, Kylie.

Kylie Davis: Thanks. So what do you think of Val AI? I'm really intrigued by this new trend in proptech around adoption that I'm noticing that is top-down and bottom-up. Rather than just targeting end customers, we're seeing a growing number of proptechs, especially in this environment, energy efficiency, and construction space, that are being driven by empowering corporate players, valuers, insurance, and banks, and their money supply within transactions to make their customers support better adoption. There's a real carrot and stick starting to emerge, and I think it's soon going to become the norm, where financial incentives will become available to c- customers to support their adoption, but at the same time, costs will increase for those who choose to stick to traditional methods of powering their homes. But to do this for energy efficiency, we need to have really good data around what is being done to upgrade and improve Australia's established homes. And homeowners, valuers, and real estate agents are the only ones who can really provide this, and all three of us need to be doing our part. Not one single channel of that three is going to deliver everything. And I love how Val AI, through its Home Efficiency Australia product, is making it easy for homeowners to understand what they need to do to improve how their home performs, and allows them to build a plan and take steps as and when they can, and how that data then feeds back into the ecosystem of understanding around valuations, which then ties into finance. And the fact that Val AI has this consumer capture as part of its appeal to the big end of town, and I love the symmetry of that. So if we're going to save the planet from climate change and hit our energy efficiency targets, and I really hope we do, we need to be able to make significant change quickly. And I love how the tools are now emerging to make this practical, pragmatic, and possible. So well done, Val AI. Now, if you have enjoyed this episode of the PropTech Podcast, I would love you to tell your friends or drop me a line either via email, LinkedIn, or on our Facebook page. You can follow this podcast on Spotify, Google Podcasts, Anchor, and Apple iTunes. I'd like to thank my podcast producer, the fabulous Charlie Hollands, and our sponsors, Direct Connect, making moving easy; Dynamic Methods, the name behind Forms Live, REI Forms Live, and RealWorks; and the PropTech Association of Australia, Australia's industry body supporting the flourishing proptech community. Now, if you're an Australian or a New Zealand proptech who would like to be on the show, drop me a line via LinkedIn or kylie@proptechassociation.com.au. Thanks, everyone. Until next time, keep on propteching. Do you run a proptech business or are you the founder of a proptech? Make sure you join the PropTech Association of Australia. It's Australia's new not-for-profit association made up of tech people who are passionate about the property industry and committed to improving experiences in how we buy, sell, rent, manage, build, and finance property. Joining will give you access to events and networks across Australia and globally to help you promote and grow your business. Go to proptechassociation.com.au and follow the prompts to join.