Spanning everything from management and booking platforms to smart offices and homes, PropTech is now an area that more investors are taking note of, with changes to our work and living habits driving digital opportunities in areas like co-working and housing.
Naturally, COVID has had its part to play, with the demand for PropTech solutions increasing over lockdown, be it making property viewings digital or enabling flexible working solutions.
But that’s not to say PropTech is new or that the sector wasn’t on the up pre-Covid, with PwC’s data showing consistent upwards growth to the number of global PropTech deals between 2014 (209) and 2020 (501).
However, when compared to other sectors such as fintech, which saw 2,456 deals in H1’21 alone, it’s clear PropTech has lagged in terms of investment as well as innovation. Could all that be about to change?
When asked in 2020, 94% of investors told Metaprop they believe Covid will accelerate the adoption of PropTech, while 32% of PropTech startups held the opinion it will be easier to secure venture capital going forward.
A year later and this appears to be the case, with $9.7bn of capital raised in the first six months of 2021, which is a record for the period. However, continued success depends on distinguishing the long-term opportunities, be that hybrid working or greater digitisation within the property market.
Last month, we led a £6m investment round into Coadjute, a promising PropTech which has created a solution to connect the fragmented property transaction market, with the aim of reducing the time it takes to buy and sell a house.
Using blockchain technology, Coadjute brings together the parties in a transaction (solicitors, estate agents, etc.) who are currently operating in silo. With Coadjute, they can collaborate, update and progress transactions in real-time, thus providing absolute transparency and visibility across the property chain for the first time ever.
Long-term opportunities like these are worth getting excited about and are becoming more common – not just in the housing market but in other parts of PropTech, including areas covering workplaces and the environment.
From a VC’s perspective, all signs point to this sector hotting up, with the belief that 2022 could be a major year for PropTech – a true sleeping giant.
– Sim Singh-Landa, Investment Manager
