The PropTech revolution is in full swing, and today, there’s ever growing excitement around the sector. PropTech investment has skyrocketed over the past few years, and venture capitalists are climbing over each other to get involved with the next big thing. Perhaps it’s unsurprising given the relatively untapped potential of a vast global real estate market, however, the latest wave of digital disrupters is certainly doing something right, and some big players are getting involved.
In 2018 alone, it was estimated that around $14.85bn were pumped into the PropTech ecosystem, and these figures look set to continue skyrocketing as we enter the third decade of the 21st century. However, what is it that PropTech startups are doing differently now, than say, a decade ago? Here, we take a look at the PropTech sector and the exciting new developments that are now attracting the biggest venture capitalists in the world.
Digital Disruption for the Real Estate Industry
The real estate industry has, traditionally, been somewhat resistant to change. Unlike other industries that have embraced digital disruption over the past decade, the slow take up of innovative technologies has been something of an anomaly. The massive scale and broad scope of the industry is perhaps one reason for this, but the thinking also goes that, until now, the tools, platforms, and ideas bought to the table were simply not good enough to fuel real change.
However, today, there is a wealth of startups looking to disrupt the real estate industry across a broad range of sectors. Now, truly smart homes look to be within reach thanks to developments on both the hardware and software sides of PropTech. Blockchain technology and crypto are promising avenues that startups are embracing, geolocation and big data are providing truly insightful data sets, and crowdfunding platforms are helping both businesses and consumers to source and manage funds.
It seems then, that the PropTech sector has reached something of a critical mass, bringing together a wealth of technologies not previously associated with the real estate market. Venture capitalists have been quick to latch onto this, and as each new piece of the tech puzzle has fallen into place, the buzz around the PropTech scene has grown louder.
New Thinking and Innovative Products
Examples of why VCs are flooding the market are everywhere you look. The recent launch of Chicago-based Livly through $10 million in capital from a seed funding round led by Pritzker Group Venture Capital, Navitas Capital, and JLL Spark is prime illustration. Livly’s operating system for buildings leverages software-based solutions to connect all stakeholders of a given building; not only disrupting the traditional landlord/tenant dynamic, but also providing seamlessly integrated rent management, building maintenance, and access to a broad range of other services such as domestics,
The key here is Livly’s holistic approach to a broad range of disparate problems, essentially connecting tenants, landlords, and service providers through a centralized piece of software. However, more targeted approaches are also making themselves known. MetaProp’s broad portfolio of startups covers everything from drone-based property inspections to visualized construction management and risk assessment—essentially casting a wide not over the real estate industries future outlook.
Finally, as technology continues to develop and big data, analytics, and blockchain begin to make an impact, many venture capitalists are looking towards the financial side of the real estate market for truly revolutionary “disruption”. The advent of smart contracts and blockchain-based mortgage provisions will shake up a multibillion-dollar industry that is ripe for the picking. It’s no surprise that VCs want a piece of the pie, particularly as PropTech begins to merge with FinTech to revolutionize the way we buy, sell, and rent the spaces we inhabit on a daily basis.
About Carson Derrow
