Solving the Housing Challenge of 1.6 Billion People through Sheltertech

December, 20, 2022 - If we don’t change course, three billion people will live in inadequate shelter by 2050, many living in slums and informal settlements that, for generations, have trapped families in cycles of vulnerability, poor health, and social injustice. Shelter represents more than walls and a roof. Shelter means security, well-being, and home. Home is where our story begins.

Despite the growing demand for affordable housing worldwide, low-income families are largely underserved by housing markets. They are not only shut out by the income requirements of the mortgage and financing sectors but are also unable to afford high-quality building materials. There are millions of people seeking economic products and services to make their homes livable and stronger. Yet, compared with other sectors, such as finance, education, agriculture, and health, the housing sector has generally failed to attract and support entrepreneurship.

With the vision of a world where everyone has a decent place to live, the global non-profit organization Habitat for Humanity works with local communities, governments, peer organizations, and the private sector to remove the systemic barriers preventing low-income and underserved families from accessing adequate, affordable housing. Habitat partners with families, volunteers, and stakeholders to address the housing challenges of the 1.6 billion who currently lack decent shelter globally and helps make housing market systems more responsive to their needs.

With challenges such as climate change, epidemics, economic recessions, and disasters increasing the affordable housing gap, Habitat has pioneered the adoption of housing technology and innovation in driving sustainable change, so that people can thrive and live with dignity, security, and resilience. To reach that goal, Habitat’s Terwilliger Center for Innovation in Shelter was formed in 2016 to catalyze housing solutions that are disruptive, scalable, and innovative, in recognition of the immense opportunities that exist in incipient housing technologies and their potential to transform and optimize the delivery of traditional shelter products and services. Many disruptive technologies for affordable housing are being developed by startups and scaleups, and connecting them with partners such as accelerators, corporations and investors can go a long way in bringing these innovations to mainstream markets.

The amalgamation of innovative and promising technology geared to address the housing needs of low-income families evolved into a new impact investment category: sheltertech.

At a first glance, sheltertech might seem like its cousin, proptech, which in recent years has emerged as the umbrella concept for cutting-edge technologies to optimize real estate markets. However, proptech focuses predominantly on innovations for commercial buildings, and middle- and upper-class residential homes. It hasn’t addressed the need for affordable housing in low-income communities.

This is where sheltertech finds its niche, gathering innovations that can scale, streamline, digitize, or disrupt traditional housing services and generate social impact. Sheltertech startups leverage housing solutions as drivers of economic growth and equality. Identifying sheltertech as a distinct though the cross-cutting sector is critical to uniting industry stakeholders and investors towards sustainable transformation.

As one of the first movers into the sheltertech space, Habitat for Humanity set its sights on the sector to scale technologies that can improve the place families around the world call home. Yet, the reality is that the sheltertech ecosystem is in its infancy, often overlooked by investors, who usually support ventures catering to the middle- and high-income markets with faster returns.

Nonetheless, Habitat for Humanity set an ambitious goal of making sheltertech one of the top five impact investment categories. To mobilize startups, investors, and partners across the real estate and housing value chains towards this goal, Habitat launched a platform to convene the sheltertech ecosystem, building upon the organization’s experience in making housing markets more inclusive. Habitat’s ShelterTech became the world’s leading platform for affordable housing innovation, offering a wide range of initiatives to fast-track shelter solutions:

• ShelterTech tracks embed existing accelerator programs with a sheltertech lens
• ShelterTech awards offer a stage for recognition and connections within Habitat’s global housing forums
• The community offers continuous engagement opportunities for participants
• The knowledge hub serves as the launching pad for sheltertech resources
• Catalytic funds offers funds that enables startups to pursue pilots to get closer to the low-income customer segments
• And, the ShelterTech accelerator programs are a key pillar of the platform for fostering entrepreneurs and scaling groundbreaking solutions

Habitat launched their platform under the name ShelterTech deliberately, to introduce and increase awareness of sheltertech as an industry and provide the jumpstart it needed to become the talk of the town in the impact investment space. Out of this need for further advances in innovation in sheltertech, a new and exciting collaboration between Habitat for Humanity and Plug and Play has been born. For Plug and Play, which operates the world’s largest innovation ecosystem, sheltertech is an exciting avenue to infuse with latest innovations and to bring new corporate players to the sector.

As sheltertech solutions tackle inter-connected challenges in housing and sustainable development, embracing a multi-stakeholder approach was and continues to be, essential. Thus, Habitat for Humanity has partnered with many industry leaders to launch and grow its ShelterTech platform, including Plug and Play, the Hilti Foundation, Autodesk Foundation, Dow, Keith V. Kiernan Foundation, The Dotson Family Fund, BDO East Africa, CIIE, Brigade REAP, La Mezcladora, Global Urban Village, Pangea Accelerator, Village Capital, and Villgro Philippines.

To date, the platform has supported more than 100 sheltertech startups and scaleups in Southeast Asia, India, Europe, Latin America, the Middle East, and Africa.

This brings our story to today.

It’s clear that large corporations across the real estate and construction value chain can – and must – also play a key role in embracing and scaling sheltertech solutions. However, major businesses have remained slow or unable to take up innovative housing approaches due to challenges in finding the right startup partners, corporate bureaucracy, or limited innovation resources.

Investment in innovation and technology is essential for any corporation that wants to succeed in today’s fast-changing world. In addition to internal R&D to develop new products and services – and improve existing ones – industry leaders are increasingly turning their attention to open innovation strategies. Through open innovation, businesses leverage their size and expertise to partner with agile startups in order to incorporate new technologies and innovative ways of working into their business structures.

Plug and Play’s and Habitat for Humanity’s partnership kicked off with the ShelterTech sub-Saharan Africa accelerator program, launched in May 2022. The program combines Habitat’s existing accelerator structure and long-standing relationships in the housing sector with Plug and Play’s worldwide innovation ecosystem consisting of a network across more than 20 industries and expertise of accelerator programs, innovation services and investment funds, venture capital partnerships, and direct investments.

Together, Plug and Play and Habitat for Humanity are providing capital, visibility, connections, and knowledge for sheltertech startups and ecosystem participants. In addition to empowering new actors to enter the space, the two organizations aim to elevate sheltertech globally to reach new stakeholders interested in creating housing solutions that are sustainable, profitable, and long-lasting.

The ShelterTech sub-Saharan Africa program is accelerating 10 startups that are already impacting affordable housing across the value chain, from building materials, financial services, water, and energy. The cohort includes core housing innovations such as: Kubik, which turns plastic waste into low-carbon buildings, Start Somewhere that has designed an easy-to-use interlocking construction system uniquely suited for construction in informal settlements, and Zelij Invent and their award-winning bricks and pavers made out of plastic waste. The program also includes startups providing necessary utilities, such as Majik Water which generates water from the atmosphere, HydroIQ that helps homes use, manage, and pay for water efficiently, and Reeddi that delivers battery packs to bring portable electricity to the home.

Digital innovations are also represented in the cohort and includes fintech startups like Nyumba Mkononi, which allow individuals to purchase construction materials incrementally, and Sikidan Homes and H28, which provide low-income communities ways to save, receive loans, and purchase their homes. The batch also includes Lumkani and Sugar Insure, that secures new coverage and products to the uninsured affordable housing market.

While the current accelerator is a core component of Habitat for Humanity and Plug and Play’s partnership, it's only a starting point for scaling sheltertech. The ongoing collaboration between the two organizations also includes a bigger vision to expand the ecosystem and help corporations leverage sheltertech innovations through startups.

To this end, Plug and Play is working on adding sheltertech as one of its core industries – also known as verticals – providing innovation services to large, global corporations helping them supercharge housing innovation efforts in their respective focus areas.

The corporations that support the vision of sheltertech will benefit from Plug and Play’s innovation services that can help corporations explore and scout potential partnerships with the most disruptive startups aligned to their innovation strategy. In addition, corporate innovation teams can participate collaboratively in accelerator program activities, innovation workshops, culture change events, and curated trend sessions, to enhance their innovation capabilities. The vision of a Plug and Play sheltertech vertical aims to move all key actors in the sector forward, thus helping boost the pace of innovation for the sheltertech category.

By partnering with Plug and Play, large corporations join an ecosystem of more than 500 corporate partners and 50,000+ startups. Plug and Play operates offices in 50+ countries and has experience working on innovation in more than 20 different industries, including real estate, new materials, sustainability, and proptech.

Sheltertech’s story just getting started and we want you to be a part of it.

Support the future of sheltertech

Plug and Play and Habitat for Humanity would like to invite like-minded organizations to solve the housing challenges of the 1.6 billion through sheltertech.

Read more on Habitat for Humanity’s ShelterTech platform and learn more about Plug and Play’s innovation platform.

You can also get in touch with Lizan Kuster, Habitat’s Director for Entrepreneurship & Innovation (lkuster@habitat.org) or Nicolas Chow, Director for Sustainability EMEA at Plug and Play (nicolas@pnptc.com).