Funding in PropTech firms fell marginally by 3 per cent to USD 719 million during the last calendar year, as investors continue to have a positive outlook on the growth of startups providing technology solution in real estate space, according to a Housing.com report.
ProTech players had received USD 742 million in the 2021 calendar year. “Despite global economic uncertainties, funding in PropTech firms experienced a slight dip in 2022, reaching USD 719 million,” Housing.com said. The cumulative investment between 2009 and 2022 has reached nearly USD 4 billion in PropTech firms, with a compounded annual growth rate (CAGR) of 49 per cent.
“Over the past decade, the real estate sector has made significant strides in adopting innovative technologies, particularly in the last three years. The COVID-19 pandemic and subsequent lockdowns served as catalysts, accelerating the adoption of technology across the industry,” said Dhruv Agarwala, Group CEO of Housing.com, PropTiger.com & Makaan.com. As per the data, shared economy platforms such as co-living and co-working secured the majority share during the last calendar year, accounting for 64 per cent of the total fund inflow. This surge of investor confidence can be attributed to the perceived growth potential in these segments.
PropTech players offering construction technology solutions received 15 per cent of the total funding in 2022. This trend reflects the real estate developers’ growing emphasis on reducing construction times while maintaining high-quality standards. In countries like India, where extended construction cycles inflate project costs, PropTech solutions are increasingly being leveraged for effective project management. Agarwala noted that the coworking segment has witnessed rapid expansion in the last three years, driven by the escalating demand for flexible workspace solutions.
Despite facing challenges during the COVID-19 pandemic due to the temporary closure of schools and colleges, the co-living segment made a remarkable recovery with the reopening of educational institutes and offices. Co-living operators that weathered the pandemic storm experienced a V-shaped recovery, with substantial demand for superior quality rental accommodations, Housing.com said. The report encompassed various investment deals, including Debt, PIPE (Private Investment in Public Entity), PE investments in Special Purpose Vehicles (SPV), Project-level investments, Pre-IPO PV deals, and buyouts.
However, deals with undisclosed amounts were excluded from the analysis to maintain transparency. Commenting on the report, Mumbai-based startup Reloy founder Akhil Saraf said, “Over the past few years, global economies have witnessed significant disruptions, causing a shake-up in the VC PE world. “Investors have become more cautious in their approach to deals, having learned from past experiences with unsuccessful ventures. Start-ups with high cash burn rates are facing challenges in this macro environment.” Reloy, which helps builders in generating referral sales, has raised funds from HDFC Capital and other investors recently.
Abhishek Tripathi, co-founder of co-living firm Settl, said, “Proptech in India is currently in its early stages but holds significant promise for growth. Its emergence has already brought about notable transformations in the real estate industry.” As per the Housing.com data, funding in PropTech stood at USD 551 million in 2020, USD 549 million in 2019, USD 527 million in 2018, USD 206 million in 2017, USD 168 million in 2016, USD 127 million in 2015, USD 203 million in 2014, USD 51 million in 2013, USD 15 million in 2012, USD 9 million in 2011, USD 6.1 million in 2010 and USD 0.2 million in 2009.
Ankita Sood, Head of Research, Housing.com, said, “Today technology is being used across all stages of the real estate lifecycle, from finding a property to closing the deal. This is also cutting time and pricing, making processes for all stakeholders more efficient and streamlined.” Founded in 2012 and acquired by REA India in 2017, Housing.com is a full-stack proptech platform for homeowners, home seekers, landlords, developers, and real estate brokers. The company offers listings for new homes, resale homes, rentals, plots, commercial spaces and co-living spaces in India.
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