The year 2019 was, without a doubt, the best investment year in PropTech.

If we look at the data that the PropTech experts offer us, we discover the following:

  • In Europe, according to Proptech1, in 2019, investments in PropTech rose to almost 500M euros, excluding investments in coworking and coliving.
  • According to the Unissu platform, the global stake in proptech in 2019 was $13.85 billion worldwide, taking into account 726 investment events. This figure also does not include coworking, coliving, or space as a service models and only takes into account the operations registered in the Unissu platform.
  • To finish seeing the global proptech investment scope, let’s have a look at the CreTech data. In the annual report, they say that total global investment in 2019 was $31.5 billion. This figure, unlike the previous two, takes into account coworking and coliving, for example, Softbank’s 6 billion investment in WeWork, which was the largest investment operation in proptech in 2019. If you think that coworking and coliving are definitely proptech, you should take into account this last data.

As we can see, PropTech is a very young subsector, which matches to a generational real estate change, which does not yet have a uniform and comparable database. But what is clear is the demonstrated interest of large investors in proptech; on average, these investments have grown by 45% every year since 2014. All the links of the real estate value chain are capable of innovation, and investors know it.

In Europe, the country with the highest investment in PropTech is the United Kingdom, followed by the Benelux area, France, and Spain. Just in case you are curious, the five Spanish startups with the best investments in 2019, according to proptech1, were Badi, Housfy, Spotahome, Housell and Nuroa.

If we analyze the investments worldwide, taking into consideration that PropTech is a young sector, usually investments are in the seed and early stage. However, since 2014, investments have been growing towards the early and late-stage, appearing in the year 2019 mega-rounds but, at the same time, maintaining a high investment number of operations still in the seed phase.

With all these data, we all were expecting that 2020 would be a fantastic year for PropTech investments, but the current crisis has stopped the natural growth.

How is PropTech right now?

2020 is being a complicated year. Although the real estate sector has indeed accelerated its digitization with this situation, it is also true that it has shaken and destabilized it. The real estate actors have desperately turned to unequal digitization.

We can say that technology companies that gave immediate solutions for the crisis are the apparent winners of this crisis (as for example virtual tours solutions, we have seen this week in the news how Floorfy have rose their real estate clients by 50%). But, we have to say that these inertias put pressure on the professionals who are part of the real estate market. Professionals in March 2020 felt the need to implement technology in time record that would allow them to continue working.

On the other side, the slowdown and lack of income have injured a good number of startups that were not an immediate need for the sector during the crisis and did not have enough cash to survive these months. We will still have to wait a few months to see how this crisis has affected our entire PropTech ecosystem.

A month ago, in our report on the new proptech opportunities derived from the coronavirus situation, we proposed some PropTech business that we thought could represent opportunities in the new reality, we are listing them again, just in case it serves to give ideas;

  • Processes automation, avoiding manual interactions, such as online purchases, online signatures, mobile payment, cryptocurrencies, easy access, or domotic solutions.
  • Virtual and augmented reality.
  • Construction technologies that save costs increasing efficiency and speed, or increasing control and security.
  • Robotics and 3D Printing: Avoiding manual productions.
  • IoT: Sensors to control people, spaces, and occupation, as well as the use of facilities.
  • Smart connected cities: applications that improve communication, transportation, or emergency management.
  • Communication and teleworking platforms.
  • Buildings or systems designed for security and to increase the quality of life in nursing homes.
  • Solutions to rethink housing, sustainability, cost savings, improvement of buildings.
  • Predictive maintenance

Although a priori, financing for obvious reasons during this year will reduce, and investors will look at their portfolio first before looking at the market for new opportunities, as always, the good ideas will still find financing.

Sheila Gracia

Service´s Director at the Real Estate Agents Association in Catalonia