30-year-old Daniel Norman is in the French city of Cannes getting ready for the first day of MIPIM 2019 when DealMakerz speaks to the former banker turned proptech entrepreneur, who is about to launch a new monthly subscription-based appraisal service for developers.
He is in high spirits having just spent a long weekend in the nearby ski resort of Isola, a holiday that arguably he has earned.
Norman has spent the past two years developing his platform following a stellar early career in the residential finance industry. This included latterly a two-year stint at Hampshire Trust Bank where he worked on structured funding for residential, commercial and mixed-use developments.
He is in the sun-kissed French Riviera city to promote the cloud-based development appraisal platform which he co-founded with software engineer Jonathan Raoult.
Appraised.tech is due to launch in late Spring this year and Norman claims it will revolutionise the way developers appraise and manage sites and also interact with lenders.
This week the fledgling London-based company announced that it had received £500,000 from several high-profile European VCs, as well as an unspecified follow-on investment from UK proptech VC firm PiLabs.
But the lead investment has come from German VC Surplus Invest making its first venture into the UK’s proptech start-up market.
While Norman’s claims about Appraised have yet to be proved (the platform is still largely under wraps) it is certainly a first. Until now developers have had to either rely on their own spreadsheet skills or use a fairly basic tool within commercial platform giant Argus which is essentially just a financial modelling tool.
Instead, Appraised promises to bring the latest tech functionality tailored to the industry crashing into the world of development appraisal and finance, including the ability to use it on any device.
Appraised has a significant opportunity to grasp. Property developers in the UK are experiencing a downturn similar in many ways to time after the 2008/9 financial crash, and a platform that enables them to interact with lender in a more integrated and collegiate way may be an advantage at a time when lenders and lending is contracting.
“The numbers of lenders has shrunk as the unreliable ones have disappeared from the market,” says Norman. “But the reliable lenders with a strong balance sheet, like the previous recession, will keep on lending.
“And that applies to property developers too – when the market’s going well a lot of non-professional ones entering the market who don’t appraise sites properly or make the best developing decisions.
“They are the ones who get their fingers burnt when the market starts to slow down, and that’s one of the things we are trying to assist them with by enabling people to appraise sites in a more data-driven way.”
At its simplest Appraised enables users to look at their developments via a simple profit and loss dashboard but most crucially for financing, enables property developers to share real-time information on a site with their lender via a data link and in a format that banks can easily read, including one-click feasibility reports.
The platform is also available as an entry level product for the UK’s 13,500 SME developers and in a more professional form aimed at higher-tier developers.
Daniel Norman began his career working for a developer appraising sites and looking at land opportunities before joining mezzanine finance specialist Strata, then moving to Davon as Head of New Business and then to private- equity backed challenger bank Hampshire Trust Bank where he took up the role of its Property Finance Lending Manager. His former boss there, Robert Grigg, is an investor in Appraised.
Norman has been on both sides of the appraisal process, both receiving them from property developers at Strata and working with lenders such as Close Brothers and United Trust Bank. But he’s also been a lender at Hampshire Trust Bank working with property developers to find the best deals as opportunities.
“There are three main reasons why I developed this product,” says Norman. “The first was accuracy – I had noticed that so many developers’ appraisals were lacking information or were inaccurate – plus improved appraisal consistency, and developer and land buyer efficiency.”
For example, his software automatically updates all appraisals on the site with changes in Stamp Duty, as they happen following Budget announcements.
“One of the things I would find as a lender in banking is that a developer would send through some information but I would then go back with a long list of what I thought were the right questions to get the data we needed,” he says.
“We’ve tried to pre-empt that and answer those questions within the format of our appraisals, and therefore cut out the back-and-forth between the parties.”
The platform also enables developers to update their actuals as a development proceeds and compare that with their forecasts, as well as adding changes in local house prices.
Norman won’t be drawn on how much all this tech is going to cost developers to subscribe to, but says this will be revealed when it’s launched, and in the meantime he’s concentrating on scaling up his team prior to that, assuming he recovers from the rigours of MIPIM.