The real estate industry has been one of the slowest adopters of technology, while other industries in the financial world have been embracing it to provide more opportunities and help investors make smarter decisions.
What The Report Shows: The first half of 2021 has seen over $9.7 billion in funding activity for property technology (proptech) startups, the most active first half on record.
The market is also showing signs of maturation as funding begins to shift toward more established companies and industry leaders emerge as consolidation increases.
The number of startups across the real estate industry has grown rapidly in the last decade, from under 2,000 to nearly 8,000, as companies look to apply new technologies like computing power, analysis and connectivity.
While real estate technology companies can be found in most countries around the world, the U.S. continues to account for the most company conceptions and fundraising. Other countries with considerable growth in proptech include Brazil, China, India, the U.K. and Germany.
Proptech companies by country
Proptech companies are applying technology across many aspects of the real estate industry, including:
JLL On The Rise of Proptech: “While real estate technology adoption was on the rise before the COVID-19 pandemic, it has become essential for today’s leading real estate players, buildings and spaces,” said Ben Breslau, chief research officer at JLL.
“Technology is at the center of the most important trends shaping business and real estate. That includes hybrid work, health and safety, and sustainability initiatives, all of which are in high demand. That’s why we expect funding within this sector to break records this year.”
Challenges, Opportunities In Proptech:
Companies have been using COVID-19 as an opportunity to experiment and accelerate technology adoption across the real estate industry, with potential to make buildings more sustainable, healthier and more human-centric.
A recent survey conducted by JLL found that the top priorities among leading global occupiers and investors are to create places that are human and green. The largest focus is on decarbonization, which real estate investors believe can deliver value and a competitive advantage.
However, a range of issues are slowing progress, including a fragmented technology landscape, lack of industry standards and privacy and security needs among the top issues slowing progress in creating green and sustainable buildings.
Notable Proptech Companies: According to Crunchbase, these companies have raised the most funds in the proptech space so far in 2021.
Service Titan: $500 million raised
Loft: $425 million raised
Procore Technologies, Inc. (NYSE:PCOR): $635 million raised through IPO in May 2021.
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