Undivided Ventures: AI, Sustainability & Data Centre Technologies with Ariel Shtarkman
Fresh out of the studio, Ariel Shtarkman, Managing Partner and Co-Founder of Undivided Ventures, joins us to share the mission and vision of Undivided Ventures and how the fund is driving innovation at the intersection of sustainability, PropTech, and construction technology. Beginning with her origin story, Ariel reflected on her journey from real estate private equity in New York to becoming a venture capitalist championing sustainable technologies in Asia. She elaborated on Undivided Ventures’ investment thesis, focusing on scaling sustainability-driven innovations in the built environment and shared key portfolio highlights, including successful investments like Structure Pal. Ariel also explored the transformative potential of generative AI, robotics, and data centers in addressing challenges in real estate and construction. Last but not least, she offered her insights on navigating fundraising in a challenging venture capital landscape and painted a compelling vision of what great looks like for Undivided Ventures.
" Now, the beauty about the real estate industry, if you look outside and you look at the commercial buildings, you have a lot of data generated on a daily basis. The challenge is, what do you do with this data? How do you mine this data in a smart way to give you better investment decisions going forward [or] better decisions on how you run the building? Where are the opportunities to reduce your expenses? On the climate side, how do you reduce your operational carbon? How do you make those buildings better? I think that here, Gen AI, can help big time, because any solution that will mine this data smartly and will create a result, an output, that end users and owners can use to their advantage.” - Ariel Shtarkman
Profile: Ariel Shtarkman, co-founder and managing partner, Undivided Ventures (LinkedIn)
Here is the edited transcript of our conversation:
Bernard Leong: Welcome to Analyse Asia, the premier podcast dedicated to dissecting the pulse of business technology and media in Asia. I'm Bernard Leong. And when we think about sustainability and climate adaptation, the built environment and data centers are part of the solution, supercharged by AI and data. What does it mean for venture capital funds targeting the built environment or construction tech and sustainability moving ahead? With me today is Ariel Shtarkman Managing Partner and Co Founder of Undivided Ventures. Ariel, welcome to the show.
Ariel Shtarkman: Thank you, Bernard. Excited to be here.
Bernard Leong: Yes, last year I had your partner, Alexander Bent, on my show, and we talked a lot about construction tech. I definitely had to get you on the show because you bring some really interesting insights that my audience will benefit from. To start with our usual format, let’s begin with your origin story. How did you start your career?
Ariel Shtarkman: Thank you, Bernard. Again, excited to be here. I’m a huge fan of Analyse Asia and have been listening to your podcast a lot—big shoes to fill here! I came to Asia 16 years ago. Originally from Israel and Russia, I grew up in Israel, completed my MBA in the U.S. at Columbia University, and began my first job in real estate private equity.
I was very passionate about real estate and fortunate to start in private equity in 2008. Even luckier, I got the opportunity to move to Hong Kong with ING Real Estate. Initially, I thought it would be a two-to-three-year Asia experience, but now it’s been 16 years, and Hong Kong is home. After private equity, I worked at Citibank, restructuring special situations in real estate and structured finance.
A few years ago, I started my entrepreneurial journey. As a real estate investor, I managed investments in Hong Kong and New York, and I also established our family office in Hong Kong, pursuing various investment theses. Over time, I became fascinated with how technology relates to real estate. Coming from a very traditional field, I found the emergence of PropTech and construction tech about seven or eight years ago incredibly intriguing. To understand what worked and what didn’t, I started angel investing in these technologies, which eventually led to my collaboration with Alex and, ultimately, Undivided Ventures.
Bernard Leong: I totally agree with you, Ariel. You're probably one of the most well-read people I’ve met. Every time we exchange book lists, I feel like I’ve missed out on some great recommendations from your list. Let’s dive into the main topic of the day—I want to talk about Undivided Ventures. I’d also like to touch on sustainability and AI. To start, could you share an overview of Undivided Ventures and the fund’s investment thesis?
Ariel Shtarkman: Sure. Undivided Ventures invests in sustainability-related technologies, focusing on both software and hardware that tackle critical needs in the built environment. We see the built environment as comprising three main areas: existing real estate, construction, and infrastructure. When you think about it, this essentially encompasses everything in the world that isn’t moving.
As Alex likes to say, when you look outside the window, whatever isn’t moving—apart from vehicles and people—is our domain. This industry has traditionally been conservative in adopting new technologies, so there is significant untapped potential for innovation. When it comes to sustainability and efficiency, the opportunities are immense.
Of course, sustainability has become a major theme—not just due to regulatory pressures, but also because of the growing need for energy efficiency. For instance, how do we make buildings more energy-efficient without putting too much strain on the balance sheet or profit and loss statements? Our thesis emphasizes that technologies now exist to reduce both expenses and carbon footprints. When you present this kind of solution to real estate companies or contractors, the adoption cycle shortens significantly because the benefits are both clear and practical.
We evaluate companies based on three key parameters. First, the company must address a specific sustainability challenge, and this challenge must be quantifiable. Second, the solutions must be highly commercial—meaning the cost to the end user needs to have an immediate, positive return on investment (ROI). If the ROI isn’t evident, the solution isn’t scalable. Third, we are deeply passionate about scaling these technologies within the Asia context.
We’re based in Hong Kong and now have a team in Japan. While we’re targeting companies across Asia, Europe, and globally, our goal is to bring these technologies into an Asia-specific context, ensuring they thrive in this region’s unique market dynamics.
Bernard Leong: Can you share some of the recent highlights of the fund? It sounds like there’s been some interesting activity recently.
Ariel Shtarkman: Absolutely. It’s no secret that the past couple of years have been challenging for venture capital in general. But when I look at our portfolio today, we’ve achieved some exciting milestones. Currently, we have nine companies in our portfolio, soon to expand to 11. What’s remarkable is how well these companies are performing. Not only are they surviving as early-stage startups, but they’re thriving.
A key data point is the progress our companies are making on their P&L. Several of them have reached significant revenue milestones, which is rare for early-stage startups in the VC space. Our focus on companies that can generate real revenues and profits is paying off, and we’ve got even more exciting developments on the horizon. For example, four of our portfolio companies are going through up rounds in the first half of the year, which will lead to a substantial increase in portfolio value over the next four to six months. This is great news for our early investors who’ve supported us from the start.
In terms of adoption, I’ll give you an example. We’ve invested in a UK-based company called Gentian, which operates in the biodiversity space. We’ve helped them open doors in Asia, and now they’re working with top-tier developers in Japan, China, and Hong Kong. This illustrates one of the most exciting aspects of our work: scalability in the real estate sector. If just one or two major developers adopt a new technological solution—whether it’s hardware or software—it often leads to broader industry adoption. This creates a clear path for scale, which is why we’re so excited about the potential of these technologies.
Bernard Leong: One question I always ask: what’s the one thing you know about your investment thesis for Undivided Ventures that very few people do?
Ariel Shtarkman: That’s a really good question. I’d say our “secret sauce” lies in the fact that Alex and I come from a real estate background. Almost everyone on our team understands real estate deeply, alongside sustainability. When we evaluate portfolio companies—or potential ones—we can put ourselves in the shoes of real estate owners or contractors. We think, “If I owned a real estate company and had a portfolio of assets, would I use this technology? Would it genuinely improve ROI, reduce expenses, or solve a real problem? Would it work within the existing structures of large companies?”
We look at real estate businesses with their many layers of command and KPIs, analyzing whether a solution would be practical and impactful across all those layers. Startup founders are naturally optimistic, as they should be, but as venture capitalists, we have to balance optimism with realism. This ability to wear both hats—being optimistic and realistic—is something unique to our approach.
To get to this level of understanding, you need years of experience in the industry. You need to have worked on construction sites, been involved in developments, and managed projects in different parts of the world. Alex, Amy, and I all bring that practical knowledge, which allows us to gauge what works and what doesn’t.
Bernard Leong: I really value our conversations, especially because your team brings such an operator’s perspective to construction and real estate. Without that operational experience, it’s hard to predict what technology will work in the industry, let alone how to scale it globally. Speaking of challenges, the past two years have been difficult for fundraising. Can you share your experience and lessons from closing your first fund during such a challenging time?
Ariel Shtarkman: Fundraising in 2023 was tough—it felt like the graveyard of fundraising. 2022 wasn’t much different. We started out overly optimistic, not realizing just how long this downturn would last. The good news is that the situation is finally starting to improve.
One key lesson is that there’s never enough time for fundraising. It’s a long, drawn-out process. The industry itself has been in a holding pattern, with investors sitting on the sidelines, waiting for clarity on geopolitics, interest rates, and stock markets. Venture capital is still a relatively small portion of the investment landscape, and family offices or large real estate corporates have been cautious about deploying capital in this area.
What helped us early on was having supportive early investors and committing our own capital upfront. Despite the tough times, we managed to build a portfolio that not only weathered the storm but thrived. We’ve had multiple up rounds, with several more coming soon, which demonstrates our portfolio’s strong potential for growth.
For those raising funds now, it’s becoming slightly easier as larger investors are coming out of their “cooling-off” period and are ready to allocate capital again. Another key to our success has been focus. By staying true to our thesis—solving sustainability and efficiency challenges in the built environment—we’ve built credibility and avoided getting distracted by trends or noise. Our conviction, backed by data, has resonated with investors, and that’s how we’ve kept moving forward.
Bernard Leong: That focus and conviction are critical. Let’s talk about generative AI. It’s everywhere, cutting across industries as a transformative horizontal technology. What opportunities do you see specifically in PropTech and climate technologies?
Ariel Shtarkman: Generative AI is revolutionary—it’s becoming the backbone for everything we do with data. "Now, the beauty about the real estate industry, if you look outside and you look at the commercial buildings, you have a lot of data generated on a daily basis. The challenge is, what do you do with this data? How do you mine this data in a smart way to give you better investment decisions going forward [or] better decisions on how you run the building? Where are the opportunities to reduce your expenses? On the climate side, how do you reduce your operational carbon? How do you make those buildings better? I think that here, Gen AI, can help big time, because any solution that will mine this data smartly and will create a result, an output, that end users and owners can use to their advantage.
Bernard Leong: If I were to ask you, given that generative AI (Gen AI) is evolving with new innovations week after week, how do you think about investing in such a fast-moving technology? Specifically, within the niche of PropTech and sustainability that you’re focused on.
Ariel Shtarkman: That’s an amazing question because it’s something we’re asked often by real estate companies, whether they are potential investors or collaborators. They’ll say, “If I implement this solution, what gives me confidence that it won’t become obsolete in a year?” While we don’t have a perfect answer, I believe Gen AI in these solutions should be seen as a backbone—not the central theme.
For example, if a company offers a solution to reduce operational carbon or improve building efficiency—or even optimize cooling for data centers while reducing electricity bills—the focus should always be on solving the specific problem first. Gen AI serves as a supporting tool, like a programming language, but faster and better. Companies should continuously develop their AI capabilities as new tools emerge, but the core solution must be functional and address a real need. If the solution is relevant and adoption is viable, the technology’s AI backbone will enhance its scalability and impact.
Bernard Leong: So what do founders and startup teams tend to get right or wrong in this niche?
Ariel Shtarkman: When it comes to Gen AI in real estate, I always want to hear about the problem being solved first. The technology is secondary. For example, one of our portfolio companies, Structure Pal, is an AI-based solution that optimizes the amount of concrete used during the design phase of development.
The founder, an architect and engineer, realized we often overuse concrete due to the complexity of running numerous variables, like safety, building codes, and design requirements. Humans simply can’t process all of this efficiently. By building a platform that leverages AI and Gen AI tools, Structure Pal creates optimized outputs, reducing concrete use by 10-15%. That’s a significant cost savings and a reduction in embodied carbon, which is a major challenge in sustainability today.
The success of Structure Pal lies in identifying a real problem—concrete overuse—and addressing it effectively with AI. The technology wasn’t the primary pitch; it was the solution to the problem that made it compelling.
Bernard Leong: So, it sounds like Structure Pal got it right by focusing on the problem first. What about founders and teams that get it wrong?
Ariel Shtarkman: Teams that get it wrong often don’t take the time to understand the real estate industry, its workflows, or sales cycles. They might develop brilliant technology but fail to make it practical or sellable for real estate companies. Sometimes, they’re too early in their approach or create solutions that are cumbersome to implement.
One of my favorite questions to ask during a pitch is: “Don’t give me your investor pitch. Pitch this to your end client—someone in the real estate industry.” This is critical because many startups don’t know how to articulate their value to the end user, even if they’re solving a real need. That can sometimes be fixed with the right sales team, but some solutions lack immediate ROI, face implementation challenges, or simply can’t scale. Without scalability, these companies struggle to gain traction.
Bernard Leong: What traits in founders and startup teams make you want to invest in them?
Ariel Shtarkman: It boils down to a few key traits. First, even if founders aren’t from the real estate industry, they need to deeply understand their target audience—who they’re selling to and what problem they’re solving. Founders often have ambitious goals, but they need a clear strategy to tackle their first client before scaling up.
Resilience and grit are also essential. The last two years have been challenging for venture capital, with obstacles ranging from fundraising to geopolitics. Founders who can adapt, pivot when needed, and stay focused on their mission are the ones who succeed.
I also value founders who are open to advice. While we don’t interfere in operations, our team includes sustainability and real estate experts who can help companies scale effectively. Finally, founders need to be genuinely passionate about what they’re doing because real estate and sustainability are tough industries, even when capital is more accessible. Passion helps founders endure the daily grind.
Bernard Leong: If we reverse that, what are the red flags that make you decide not to invest?
Ariel Shtarkman: Red flag number one is unclear or evasive answers during due diligence. Early-stage startups may not have perfect data rooms or polished numbers, but founders should know their sales figures, prospects, and go-to-market strategy. A lack of clarity in these areas is a warning sign.
Another red flag is when founders overpromise, claiming contracts with dozens of clients that turn out to be cold emails with no responses. Being realistic is always better than overhyping. Responsiveness is also important—if you’re raising funds, you should be following up and showing commitment.
Finally, we can’t invest in every amazing company because we’re constructing a balanced portfolio. However, companies that fail basic tests—like articulating a clear ROI or showing a scalable solution—simply won’t make it to the next stage.
Bernard Leong: What is your mental model for valuation? Is it about investing the right capital for a specific percentage, like 20-30% for a Series A, based on industry averages? Or are you willing to pay the price if the valuation is very high? For example, during the 2021-2022 peak, when valuations were overblown.
Ariel Shtarkman: We’ve been lucky in that there’s always a silver lining. Although we started fundraising during one of the toughest periods, valuations have become very attractive. This is the right time to invest, as we avoided participating in the hype cycle at its peak. It allows us to be highly selective in our choices.
During 2020-2021, rounds would close in two weeks, with valuations increasing within the same round due to oversubscription. That level of demand doesn’t exist anymore. While hype is building in areas like generative AI, we now have the luxury of spending more time with founders, asking the hard questions, and evaluating performance carefully.
Given that this is our first flagship fund, we’re particularly focused on overachieving. This means avoiding overblown valuations and hype-driven deals. Instead, we aim to invest in companies with clear 10x potential, not just projections based on inflated numbers or contracts that aren’t yet signed. Some companies may still operate this way, but we choose not to.
Bernard Leong: Let’s shift gears to data centers. There’s been massive growth in the Asia-Pacific region, which now accounts for 50% of global demand. For Southeast Asia alone, the first half of the year saw $30 billion in investment—a 900% increase. What are your perspectives on data centers and the technologies that power their infrastructure?
Ariel Shtarkman: Data centers are essential, especially with the growth of AI. Globally, there’s a significant push to build more of them, and the demand in Asia is even higher. Unlike other types of construction, data centers require unique specifications. The floors must be reinforced, the walls stronger, and the facilities designed to handle the heat of servers and cooling demands.
Many refer to data centers as “digital infrastructure,” which is an apt description. Within this space, technology plays a huge role, especially in improving cooling efficiency. For example, we’re currently exploring opportunities in the refrigerant space, which is critical for data center cooling systems.
Energy access and efficiency are also key considerations. How can we ensure power is sourced affordably and used effectively? Additionally, innovations are emerging to make servers generate less heat during operation, which would reduce energy demands.
Another area we’re passionate about is materials. While we haven’t yet invested in concrete substitutes, there are promising developments in materials that can reduce embodied carbon—a crucial issue in data center construction.
Finally, management tools for large-scale portfolios of data centers present another opportunity. These tools, often powered by generative AI, provide critical insights into operations and performance. Data centers have evolved from being considered a niche asset class, often lumped with industrial properties, to becoming mainstream and more popular than office or retail properties.
Bernard Leong: On the topic of data centers, the demand for construction technology is one thing, but what about chip and server technologies? How do they factor into your considerations?
Ariel Shtarkman: Chip technology is a bit outside our purview as a fund since it doesn’t directly touch real estate. However, it does have an impact on the design and operation of data centers. For instance, how servers operate—how much energy they need, how much cooling they require, and how much space they occupy—affects the physical structure and design of data centers.
We’re closely watching developments in chip technology because they influence the future of data center design. Questions like “What will the data center of the future look like?” drive our focus. While we aren’t involved in server technology, we’re deeply interested in the physical spaces needed to house them.
At a recent investment roundtable, someone even floated the idea of putting data centers in space. It’s futuristic, yes, but not entirely out of the realm of possibility. However, it’s not something we’re focusing on right now.
Bernard Leong: One of my favorite questions—what is the one question you wish more people would ask you about Undivided Ventures or any topic related to your industry?
Ariel Shtarkman: The question I’d like people to ask is actually the one you just asked: “What is the secret sauce and why now?” In fundraising, it’s crucial to articulate these points clearly, as they define our positioning and vision for the future. I’ve already touched on this, but it’s worth emphasizing.
Bernard Leong: Let’s dive deeper into the “why now” part. You’ve articulated your secret sauce well, especially in terms of your niche focus. Why do you think now is the right time for Undivided Ventures?
Ariel Shtarkman: There are a couple of reasons. First, this is an opportune time for venture capital in general. VC is finally emerging from a long “winter.” Institutional investors and family offices are becoming more interested in allocating capital to alternatives like VC. On top of that, valuations are very attractive right now, making it an excellent time to invest.
Specifically for Undivided Ventures, we’re already seeing positive valuation upticks in our portfolio, putting us on an upward trajectory. Beyond that, there are tectonic shifts happening in the real estate and construction industries. Companies in these sectors are becoming much more open to innovation—whether it’s sustainability, efficiency, or other transformative technologies. Early-stage companies that tackle these challenges are poised for significant scalability, making this an incredibly compelling time to invest.
Bernard Leong: My traditional closing question: What does “great” look like for Undivided Ventures, both in the short term and the next few years?
Ariel Shtarkman: In the next 12 months, “great” would mean successfully closing our first fund and completing fundraising by the fall. We also aim to focus on investing in best-in-class solutions. One of the areas we’re considering for our second vehicle is data centers, so stay tuned for that.
Over the next few years, “great” means identifying and investing in transformative companies in the areas we’re passionate about—companies that make a difference and have the potential to scale significantly. We aim to invest in two to five new companies (or more) annually. Additionally, “great” is about continuing to be thought leaders in this field, sharing our insights through podcasts like this, and ensuring our thesis reaches a broader audience.
Bernard Leong: This has been a fantastic conversation, Ariel. But I know this won’t be your last time on the show—you’ll definitely be back! Before we wrap up, do you have any book recommendations or recent inspirations you’d like to share?
Ariel Shtarkman: Absolutely. I read a lot of books when I can—and I encourage my children to read, too! A recent favorite is Hidden Potential by Adam Grant. It’s a great read on personal and organizational development, covering everything from education to fostering the right mindset in teams. I found it particularly relevant as Undivided Ventures is still a young organization.
Another book I return to every year is Meditations by Marcus Aurelius. It’s a quick but impactful read, and I find it helps set the tone for the year ahead. It’s one of those timeless works that inspires me each time I revisit it.
Bernard Leong: That’s fantastic! You’re clearly a fan of Stoicism—just like my wife.
Ariel Shtarkman: (Laughs) Yes, definitely.
Bernard Leong: How can my audience reach out to you or learn more about Undivided Ventures?
Ariel Shtarkman: They can email me directly at ariel at undivided dot vc. And of course, all thanks to you, Bernard, I’m happy to connect with anyone who’s interested.
Bernard Leong: Thank you, Ariel. For those listening, don’t forget to subscribe to us on YouTube or check out our new video content on Spotify. Ariel, thank you so much for coming on the show. I look forward to speaking with you again soon.
Ariel Shtarkman: Thank you so much for having me, Bernard. It’s been a pleasure.
Podcast Information: Bernard Leong (@bernardleong, Linkedin) hosts and produces the show. Proper credits for the intro and end music: "Energetic Sports Drive" and the episode is mixed & edited in both video and audio format by G. Thomas Craig (@gthomascraig, LinkedIn). Here are the links to watch or listen to our podcast.
