Melbourne startup hones in on future office use

Melbourne-based technology startup XY Sense says demand for its workplace data measurement platform is growing rapidly, as big tenants seek answers on exactly how much space they will need as the COVID crisis and flexible working shake up office markets across the country.  

XY Sense this week secured $5 million in seed funding to continue to commercialise its technology, with the fundraising round backed by some of the nation’s most prominent venture capital funds and angel investors, including Blackbird Ventures, Canva investor Sandy Kory and former Outware chief executive Danny Gorog.

The platform, which is a sophisticated sensor and artificial intelligence system, monitors workplace utilisation in real time, measuring meeting room occupancy, desk utilisation and how workforces interact with the office environment.

XY Sense founder Alex Birch, who established the company in 2016 with business partner Luke Murray, said the system had been designed to help firms understand how well an office was being used.

Mr Birch said he and Mr Murray had set out to design the platform several years ago as flexible working and hotdesking were rising to prominence, to help large tenants optimise the amount of money they were spending each year on office properties.

For large firms, office accommodation is typically the second or third biggest expense, and pre-COVID, Mr Murray said global studies showed many organisations were only using up to 60 per cent of their space effectively.

“With that in mind, and when you see frustrations from anyone that works in a large workplace where you get pockets of overcrowding, where it’s hard to work with your colleagues and it’s hard to book a meeting room, having a true lens on how space is actually being used really helps the real estate teams in these large organisations make better decisions and make it more effective for the people in this space,” Mr Birch told Australian Property Investor Magazine.

Mr Birch said the coronavirus crisis had raised significant questions around the future of workplaces, with many big tenants questioning whether they needed to continue leasing large offices as their employees transitioned to working from home productively.

“We are not pivoting, but the fact that we’ve got a sensor that can very accurately understand the position of people on a floor, anonymously and in real time, that equips us very well to accurately provide social distancing warnings,” Mr Birch said.

“So if people are in breach of that social distance we can alert, send a text message or an alert in our app.

“For the longer-term, workplaces have changed forever, and many organisations are thinking about reducing their footprint. 

"But the question is by how much, and what are people going to actually be doing in the workplace? 

“There is a longer-term aspect as well from us - how is the use of space going to change? 

“Measuring it is very important.”

Mr Birch said XY Sense had secured several large multinational firms as clients, with firms with a headcount of more than 1,000 the target market.

XY Sense is on track to install its sensors in more than 200,000 square metres of offices across Australia and New Zealand by the end of the year.

In response to COVID-19, XY Sense integrated a suite of real-time social distancing and desk integration features to help companies better monitor desk booking and usage, deliver distancing breach alerts and target cleaning services more effectively.

“There has been a heightened sense of interest with this crisis at the moment, we have permanent rollouts and trials under way, but it is more about the focus on the workplace that I would say has been a real big benefit for us,” Mr Birch said.

“That puts us in good stead because that’s what we’ve been doing all along, trying to help organisations understand exactly how much real estate they need and make their people’s lives most effective in the workplace.’

Blackbird Ventures partner Nick Crocker said the venture capital fund was attracted to the XY Sense investment because of the deep understanding of office issues that Messrs Birch and Murray had formed over several years.

Mr Birch previously co-founded corporate real estate company Serraview, a firm he exited in 2016, while Mr Murray held a leadership position.

“Alex and Luke are exceptional engineers who have a deep understanding of the needs of their customers because they’ve served them for nearly two decades,” Mr Crocker said.

“The problem they’re solving isn’t small. 

“In Australia alone, the commercial real estate industry is worth around $23 billion a year and space is usually a company’s second or third largest expense.

“But in 2020, real estate teams are still having to make high-stakes planning decisions in the dark because they can’t access data they need.

“XY Sense is opening up whole new possibilities for those teams, helping them to plan that space using real time, centimetre accurate data, in a way that’s completely new.”