Is proptech the next bubble market?

Proptech bubble

With money pouring into the proptech sector thanks to the likes of flexible office giant WeWork and venture capital firm Fifth Wall, Nick Hughes asks what risk there is of a new bubble forming.

WeWork’s $47bn valuation has generated plenty of debate in recent months, with the likes of Gandel highlighting the mind-boggling scale of its losses ahead of its planned IPO.

More bullish commentators, on the other hand, point out that WeWork is not a one-dimensional business – it also owns and manages its own assets – and that sky-high valuations are indicative of a company disrupting the property sector with an entirely new business model. Amazon, lest we forget, burned through hundreds of millions of dollars before it became the pervasive money-making machine it is today.

The flipside of the Amazon success story was that when the dot-com bubble of the late 1990s burst, many internet start-ups that had attracted huge investment went to the wall leaving investors counting the cost.

With money pouring into proptech, what risk is there of a new bubble developing? Or are we simply seeing, in the words of one senior proptech executive, a “WeWork bubble”?

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