In the third quarter of last year, global venture investments into proptech reached $24.6bn, surpassing the most optimistic estimates for the year and putting the industry on track to comfortably exceed the $30bn full-year mark.
The ever-growing investment landscape goes hand in hand with a maturing market that in 2020 will see significant consolidation and the emergence of clear category winners for each tech type and asset class.
Lessons learned from the fall from grace of previously untouchable giants such as WeWork and Uber will drive venture-type investors to be stricter in their scrutiny of the companies they invest in and do away with me-too-type behaviour. This will create an ever-wider gap between sophisticated, professional investors and other less rigorous ones.
We can also expect to see an acceleration in collaboration between traditional property companies and their complementary proptechs.
This year should be a fruitful one for residential and construction tech. While in the past, asset-management-type software focused mostly on larger CRE portfolios, there is now a strong interest in tech for the residential space, with offerings ranging from the ‘hotelification’ of rental properties via services start-ups to the streamlining of management operations using smart home technology.
Construction tech has been a strong yet isolated theme for some time, but now, with the continued growth of large incumbents offering end-to-end solutions, more and more industry players are using tech as a matter of course on site and in offices. This increased traction will garner more interest and investment in the space, as the market accepts that there is no divide between ‘proptech’ and ‘contech’.
Although no tech is off the menu in 2020, certain verticals in proptech are fairly saturated and therefore we can expect to see a tapering off of capital (early-stage capital, at least) going into areas such as marketplaces or property management software. Investors will increasingly want to bet on integrated, end-to-end solutions that provide a one-stop shop for the asset class or user they are targeting.
Increasingly, the market will reward solutions that go straight to the end users, addressing their fundamental needs with seamless, hassle-free solutions.
Angelica Donati is chief executive of Donati Immobiliare
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