Last year was a bumper one for proptech. Not only did tech giants continue to validate proptech, with investments such as Softbank’s big bets on WeWork, Oyo, Reonomy, OpenDoor and Compass, real estate investors piled in as well.
Altus’ latest CRE Innovation Report found that 53% of real estate investor respondents with more than $250m of assets are directly investing in proptech. 2018 also saw the rise of proptech-specific venture capital firms.
Looking ahead, investors are prepared to double down on their stakes in 2019; 96% of investors in the MetaProp Mid-Year 2018 Global PropTech Confidence Index said they planned to make the same number of proptech investments or more in the next 12 months.
Yet while several start-ups I have spoken with report a positive shift in the mindset of industry clients, widespread user adoption has yet to materialise. So will this be the year proptech truly takes off – and if yes, which aspects of it exactly?
Not so long ago, there was a lot of hype around blockchain. However, that has died down due to the turmoil surrounding cryptocurrencies – billions of dollars in value were wiped out last year and there were concerns over the hacking of wallets and exchanges – and the fact that the real benefits for real estate, such as the tokenisation of land registries, will be a long time in the making.
AI is another industry buzzword, but theoretically, it can be applied to almost all products, so whatever type of proptech real estate players implement, it will sooner or later comprise AI. In other words, it is hard to single it out.
To get a better picture of the specific technologies set to come to the fore, I asked a variety of VCs from around the world what tech they thought would be prominent in 2019. They overwhelmingly cited ‘smart’ technologies: internet of things-driven automation, data analytics and products that enable operational management efficiency across uses and asset classes.
Venture funds and real estate firms will bet big on ‘smart’ proptech in 2019
This stems from the need to implement technology that has a tangible commercial value.
Couple this with the fact that last year, many in the industry woke up to the importance of user-behaviour tracking, experience maximisation and data-driven insights that can be actioned to maximise the usage and value of a space, and it is easy to see why “smart” is the buzzword for 2019.
Venture funds and real estate firms will bet big on “smart” proptech in 2019, and the evidence suggests it will be extensively implemented across asset classes and regions. Let’s see what else the year holds!
Angelica Donati is chief executive of Donati Immobiliare