Cameron Steele’s father worked in real estate for decades. But it took more than 25-years for him to follow in his dad’s footsteps.
After a career with stints at Oracle, Booking.com and in private equity, Steele spotted a gap in the real estate market and used his software experience to fill it.
Prophia, the company he co-founded in 2018, uses AI to make real estate contract data more trustworthy and accessible. When the recent AI boom heralded by the release of OpenAI’s ChatGPT in November 2022, took the world by storm Prophia had been helping customers take advantage of artificial intelligence for years.
Prophia is aiming to modernize an industry that has been slow to embrace new technology. Instead of typing a summary of a contract the Prophia system can highlight and quantify the most relevant parts.
“That kind of work is just better done with technology. We allow people to redeploy their efforts,” CEO and co-founder Cameron Steele said.
Real estate is the biggest asset class in the world. Even small efficiencies in the sector could potentially be worth billions.
What problems are Prophia helping clients solve? Commercial real estate is an economic decision. It’s based on cap rates; it’s based on cash flow and the contractual risk associated with those things. Our customers are very analytical. They’re trying to figure out ways to generate returns and there’s some market dynamics here that are difficult.
Put simply, we’re providing better data to our customers who’ve historically never had the data, they don’t trust their data, they don’t have it available to them about how buildings are managed and operated.
A lot of our customers, especially large ones, will negotiate a termination in the middle of their lease. If a large tenant decides to terminate their lease, it impacts the value of the building dramatically.
What does your AI do? We’re pulling data out of documents and legal agreements and into a database. We have a set of tools that our customers use to track and manage, and hopefully make decisions based on a really trusted data set.
Our AI identifies and annotates certain concepts within these documents. We pull them out, we standardize the terminology, and then customers can use that data however they want. It’s all about trust with verification. We’re in the trust and accessibility business.
What was it like for real estate investors before the advent of AI? Our customers were looking at source documents for contracts, and then they were using what I would call “pre-Internet manual services.” Someone would type up a summary of that document and those are the two things they would use. And you would guess the summary is what they call abstracts are very subjectively accurate because it’s a person literally sitting down and typing things up. And I think that’s going away in time.
That kind of work is just better done with technology. We allow people to redeploy their efforts.
Where do your customers come from? We work with commercial property owners and investors. A lot of times these folks are not household names because they don’t really want to be: Some you do know, but others you don’ because they like to stay behind the scenes. Our customers are private equity real estate funds that are managing a lot of assets.
How do you see technology changing the real estate investment industry? Digitization is happening with all legacy industries. They’re just trying to look for ways to be more efficient. And it’s just starting, but it’s going to be an incredible point of leverage for a lot of industries, particularly in real estate, where they haven’t really benefited from what I call “traditional productivity gains” from technology in the past.
Why found a company at this stage of your career? I had been told by a friend to take a look at commercial real estate while I was at OpenTable. So I started poking around and it just became very obvious to me that the way things were today or the way they were going to be in the future … there was an opportunity to go in and make changes. I’m a big believer in identifying a problem and then applying technology to it. I don’t think a lot of Silicon Valley does it this way.
What’s it like fundraising in the current economic environment? I think it’s good and bad. When we started our Series A financing process in February of last year and it was right when the market had turned; the war in Ukraine had started. There was a lot of uncertainty in the market. So that made it harder for everybody and obviously valuations were impacted … People are sharpening their pencils, doing more diligence.
How do you see opportunity to find value in San Francisco real estate right now? I think we’re in an environment where there’s a supply demand mismatch, particularly in urban office. With Covid and with layoffs and people working from home, it has created an environment where there’s a supply demand mismatch with a diversified tenant base. That’s just going to take time to work through. I think it’s an opportunity for the city to diversify some of the downtown activities. So you’re not completely dependent on just one industry. New York is a good example where they have areas of commercial activity, but they’re mixed in with multifamily and arts and things like that.
You moved to Amsterdam, Netherlands, when your company was acquired by Booking.com, what was that like? We only moved for a year because my oldest daughter was going to high school. But it was great. We did a lot of travel. I think it kept us really close as a family. I worked at Booking.com, which is one of the biggest employers in Amsterdam. We had an incredible office right in the middle of the city, extremely diverse. It really helped me understand about growing really deep international businesses. And for the family, it was wonderful. It was a really, really good time for us, and I wish we could have stayed there another couple of years.
What do you miss about European cities? Our kids could take the public transportation and had a lot of freedom. It was very safe and so all those things were great. The US is very car centric, which can be frustrating, which is why I like living and working in San Francisco. I can bike in to work and not be stuck in my car so much.
Favorite Bay Area restaurant? There’s a Burmese place – it’s not Burma Superstar which is wonderful but tends to be more touristy. It’s called Mandalay, which is, I think equally, if not as good. The tea leaf salad is amazing. It’s a yellow building on the corner of Sixth and California. You can’t miss it.
ABOUT PROPHIA
- HQ: 353 Sacramento St., San Francisco
- Employees: 38
- What it does: uses AI to extract data from leasing contracts — such as dates, rent and tenant rights — to save customers’ time that would otherwise be spent combing through legal agreements
- Funding: $10 million Series A in December 2022
- Notable clients: Spear Street Capital, Nuveen, FD Stonewater, RXR
ABOUT CAMERON STEELE
- Age: 54
- Hometown: San Francisco
- Residence: Richmond District, San Francisco
- Education: B.S., Political science, Stanford
- Hobbies: “I love running and biking and so I try and get outside and do that as much as I can.”
- Sports: “Since I grew up in the Bay Area, it’s the 49ers, Warriors and Giants. I had a very limited career as an athlete at Stanford before I got hurt playing water polo. I do like the Premier League. I’m a Tottenham Hotspur supporter.”
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