Another Proptech AI Acquisition, Entrata Buys Colleen AI

Any time there is a surge of technology development, there are usually many startups, followed by a period of consolidation and acquisition. That’s been happening for a while in proptech. Like when JLL acquired Hank, an AI-powered, virtual engineering platform, at the opening of 2022. Or when high-flying unicorn Veev, which was supposed to use tech for affordable housing construction, had a financial collapse and was bought by Lennar at the end of last year.

There will likely be many more M&A actions, as it’s a predictable result of too many new companies fighting for dollars that aren’t available as investors get worried and pare back their activity. The latest example is Entrata’s acquisition of Colleen AI.

Entrata, which has a multifamily operational program, announced the acquisition. “By incorporating Colleen AI into the Entrata OS, operators can take the next step towards autonomous property management, introducing a new era for the industry,” the company said in a press release. “Through the acquisition of Colleen AI, Entrata is introducing ELI+, an elevated suite of AI products to power end-to-end workflows. ELI+ is for operators looking to harness the power of AI to transform their business through automation for even more efficiency. It’s designed to be modular and allows for swift enhancement utilizing modern AI and machine learning technology, giving operators the most up-to-date functionality. Operators will have immediate access to AI-powered collections and renewal modules, with additional modules, including leasing, in the coming months.”

Part of any M&A wave is a blurring of lines, blending over marketing hype. As GlobeSt.com has reported multiple times, there isn’t a single definition of artificial intelligence. It’s been in use for years in proptech, though in many ways and versions. The latest wave of generative AI may or may not be involved in what Colleen AI has done.

What is important, from the view of a CRE company, is to consider what any acquisition means in practical terms. Is either of the vendors one that you use? If so, then you have to consider whether it’s the acquirer, in which case this is probably a minor consideration. If the acquired company, then there is a good chance what you used from that vendor will disappear in the way you used it. Should you adopt the software of the acquirer? A thorny question given costs in money, time, and effort to shift from one company’s product to another’s.

There are also multiple reasons an acquisition might happen. The acquiring company might want specific technology from the acquired, or engineering talent with no need for the company’s products or technology, or the acquirer might want to eliminate a competitor.

This type of transaction will happen over and over until the novelty gets absorbed and the next shiny object comes along. In the meantime, watch each acquisition and consider how it might fit into your technical strategy.