Proptech venture capital firms8/7/2023 ![]() There’s an increased demand for digital solutions to pay rent and unlock doors, along with touring properties and signing rent agreements virtually, she said. “You’re seeing more Gen Z folks renting and they’re way more tech savvy, they’re interested in smart home technology, they want to control everything from their phone,” Dicko said. Gen Z is also getting older and becoming renters, a factor in an emerging theme that affects all areas of proptech, according to Fatima Dicko, founder and CEO of Sugar, a proptech startup that connects members of residential communities. In construction tech generally, there’s a new wave of companies cropping up that want to combine design, offsite construction and new materials, and those sorts of companies will likely be “key areas for investment” as well, according to Raj Singh, managing partner of JLL Spark, the proptech-focused venture fund of the commercial real estate company JLL. “I think proptech is big and broad and, particularly within residential proptech where I focus, there are so many tailwinds in the space,” Weston said. Homeowners’ attention turned to home improvement amid the COVID-19 pandemic, and with a supply shortage for housing, another way to create more housing could be renovating outdated and rundown properties. Project management software that replaces spreadsheets and emails, like Bridgit, will also likely be popular among investors as the construction industry looks to digitize pre-construction, workflows and financial management. One example is Lendflow, a startup that aims to make it simpler for software companies to embed lending services into their products. But it will likely become more prominent next year in construction tech, especially with embedded lending. Venture-backed construction tech startups raised more than $3.8 billion in funding in 2021, per Crunchbase data.Įmbedded finance-or the technology that enables payments online-is already a big theme in fintech and is already being adopted in the proptech sector, according to Weston. Within construction tech, embedded finance, project management software and home improvement tech will all continue to be popular areas for investment next year, according to Weston. “Institutions are interested in real estate, and that means that technology will have to follow,” Weston said. Real estate is an asset class that investors can get yield on, especially with interest rates so low. Renting in general is becoming more common, but more people renting homes from institutions like Blackstone paves the way for investment in different types of technology. There are multiple factors that make the macroeconomic environment ripe for proptech investing, including the shift in institutional investors buying single-family homes, according to Lauren Weston, an associate at Thomvest Ventures, who’s focused on early-stage investments in the fintech and real estate sectors. ![]() There’s also expected to be more consolidation in the industry as companies mature and look for exits, according to experts in the area. Going into 2022, there will likely be more investment in real estate software surrounding the construction and property management spaces-two sectors that were standout areas for investment within proptech in 2021, according to Crunchbase data. All told, venture-backed companies in the real estate and property tech space raised nearly $21 billion, Crunchbase data shows. ![]() With milestones like Procore’s IPO and despite low points like the collapse of construction unicorn Katerra, proptech had a banner year in 2021.
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