Artificial intelligence in the real estate industry: Drooms automates the due diligence process
12. March 2018
- Focus on advancing the virtual data room space through artificial intelligence and machine learning for increased process automation
- According to a study, artificial intelligence will have a strong impact on the efficiency of real estate transactions
- Drooms has maintained a continuous market share of 40% - 50% of virtual data rooms used for real estate transactions in its core markets since 2008
London/Cannes – In a recent survey carried out among real estate experts, 54% of respondents said that in the future Artificial Intelligence (AI) will provide competitive advantage in the real estate transaction business. Drooms, Europe's leading provider of virtual data rooms, is bringing artificial intelligence to the due diligence process with the first application of machine learning technology. With the implementation of Natural Language Processing (NLP), a sub-field of AI in the Drooms NXG Findings Manager, the process of due diligence for real estate transactions has been further automated.
Continuous international growth
In 2017, Drooms handled more than 1,500 complex transactions through its platform, from real estate sales and mergers and acquisitions to IPOs. The European company's growth in 2017 reached 30%. Since 2008, Drooms has maintained a continuous market share of 40-50% of virtual data rooms used in real estate transactions in its core markets since 2008. Drooms co-founder Jan Hoffmeister comments on Drooms' plans for the future: "Our goal is to automatically deliver a 95% accurate due diligence report over the next 4-5 years directly via our virtual data room at the touch of a button."
In research undertaken with real estate professionals in February 2018, Drooms found that 54% of respondents believe that AI already benefits their firm and gives it more competitive advantage by enabling a much higher volume and variety of documents to be searched at high speed. Almost half (49%) said that AI speeds up the due diligence process - manual and repetitive processes are reduced. The Drooms NXG Findings Manager expedites due diligence by pre-selecting relevant documents from thousands of electronic documents based on individual categories and suggesting potential findings for a red flag report.
The Findings Manager is context sensitive and recognises words, synonyms and semantic patterns. Even when teams are working in languages such as German, with its complex sentence structure, the software constantly adapts thanks to the implementation of machine learning technology. The Drooms NXG Findings Manager operates in English, German, Spanish, French and Italian as well as in Dutch and Turkish.
Artificial intelligence and innovative strength for leading market positioning
Documents in the virtual data room are usually contracts where language is employed deliberately and with precision. For this reason, language is also placed at the core of Drooms’ development. Natural Language Processing (NLP) technology has been harnessed to read and understand human speech. Central to the technology is the ability to interpret a large amount of "unstructured data" (data that cannot be read by machines yet, such as PDF files or images). NLP enables easy, fast and accurate reading of these documents.
Users of the Drooms NXG Findings Manager can add individual categories or edit existing keywords to make their search as focused as possible. The list of potential findings proposed by the software on this basis can be further individualised by assigning further calls to action or a value for each finding.
Jan Hoffmeister, co-founder and chairman of Drooms, commenting on the focus of software development said: "Our goal is to implement the most effective technology for our users. The biggest problem for them is the time-consuming and repetitive processes involved in due diligence. With the use of Artificial Intelligence, we can remedy this situation. However, changing these processes takes time - time for the software to learn from the user and time to allow internal processes to adapt as well. Artificial intelligence is not a panacea for the real estate industry. "
Drooms now has more than 130 employees from 27 countries and is represented internationally in the most important European markets with its own locations. In addition to the company headquarters in Frankfurt, the SaaS provider also has locations in London, Munich, Vienna, Paris, Amsterdam, Milan, Madrid and Zug.
Visit us at the MIPIM in the Riviera Riviera 7, Booth R7. G20, Cannes or in the Innovation Forum P-1 A54.