Future of Proptech Investment

Which Technologies are Gaining Traction for Investors and Real Estate Pros?

By Duke Long, entrepreneur in residence, Second Century Ventures
Second Century Ventures

The ink may never have time to dry on proptech investment record books as each new record smashes the previous one. In the first half of 2021 alone, equity and debt investment in U.S. proptech totaled $8.5 billion, surpassing the total amount of capital invested in all of 2020, according to GCA, an adviser in the proptech market. An impressive 50 proptech M&A transactions were announced in the first half of the year. This incredible amount of financial support for proptech amid the global pandemic is a profound indication of the desire for new real estate technology solutions across the real estate industry.

Specific categories within the proptech arena, and adjacent categories like contech (construction technology), in-surtech, and fintech, continue to attract a sizable share of the funding pool. Four categories to note with topical new solutions from the startup community:

Big Data and Analytics

Through a single cloud-based algorithmic data platform, Biproxi aims to transform commercial real estate transactions from list to close. Remarkably offers a powerful marketing platform geared to help multifamily teams manage portfolio and property performance.

Artificial Intelligence

Using a proprietary parametric design technique, Parafin uses AI algorithms to rapidly generate optimized design concepts, budgets, and investment pro-forma for real estate developers.

Sustainable Construction Technology

Energy-Producing Retail Realty has gained traction with developers in the Northern California and Nevada region over the last year through its renewable energy technology pilot programs.

Software as a Service

Notable new SaaS solutions include Leasera, a commercial property management platform developer; Valcre, an end-to-end commercial real estate appraisal solution; and Cove, a dynamic platform to connect physical and digital experiences through both easy-to-use apps and custom in-person service solutions.

Additional areas of the CRE market are ripe for innovative approaches in the post-COVID era including lodging, travel tech, and return-to-work solutions.

As funding continues to pour in, the appetite and competition to find the best new solutions grow. The beneficiaries: all real estate stakeholders, investors, lenders, brokers, agents, property companies, governments, and individual homeowners. Technology solutions aren’t the be-all and end-all of commercial real estate; it remains a person-to-person business. But technology is a key component of nearly every aspect of the transaction. Used well, it enhances the work you do—and whether you adopt new solutions or not, you can be assured tech entrepreneurs will continue to seek ways to fundamentally change the business.

Nurturing New Proptech

More than a decade ago, the National Association of REALTORS® had the foresight to make a strategic investment to support the proptech sector and equip its members with the tools needed for future market conditions. Founded in 2009, Second Century Ventures and its REACH scale-up program manage a portfolio of more than 150 technology companies from around the globe, each addressing some aspect of the diverse property ecosystem. SCV is the most active global real estate technology fund, scaling its portfolio companies across the world’s largest industries including real estate, financial services, banking, home services, and insurance.

Interested in tracking the latest news and events in proptech? Follow NAR REACH on LinkedIn.

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