附近上门

Funding to venture-backed proptech companies has surpassed pre-pandemic levels, according to 附近上门 data, with construction tech and property management startups leading the way.

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VC-backed real estate companies have raised $10.6 billion so far this year, up from the $8.3 billion that was raised during the same period last year, and higher than any year in that period in the past decade.

鈥淥ne of the things that also helped was the fact that the real estate market has been so hot,鈥� said , co-founder of . 鈥淭hat sort of had聽 a ripple effect across proptech.鈥�

The sectors within proptech to receive the most funding so far this year are property management startups ($2 billion YTD) and construction ($1.9 billion). Among the largest funding rounds for proptech companies so far this year are 鈥檚 $500 million Series F and $425 million Series D.

This year has already seen notable public exits for proptech companies, with property management startup going public through a special purpose acquisition company and construction management software company doing a traditional initial public offering.

The Procore IPO

Construction was also a traditionally 鈥渦nsexy鈥� area to invest in, Wang noted, so Silicon Valley investors and founders often overlooked the space. But investors are beginning to realize it鈥檚 an untapped market, especially because of the shortage of homes and a shortage of labor.

Procore鈥檚 IPO, along with notable exits for and , 鈥渉as created this kind of second point of acceleration where the venture capital world can see that the industry is willing to adopt technology, the growth can be really strong,鈥� according to , CEO of construction tech startup .听

Procore鈥檚 IPO raised $635 million for the Carpinteria, California-based company.

Both Brodie and , a venture partner focused on proptech at , pointed to Procore鈥檚 IPO as a milestone that will likely boost investment into construction tech.听

As Warburg Peters noted, 鈥渙ne company can spur a generation of innovation,鈥� similar to how early employees of 鈥斅爐he so-called 鈥淧ayPal mafia鈥� 鈥斅爓ent on to create billion-dollar companies like and .

鈥淐onstruction tech is where proptech was probably three or four years ago, in that you have an increasing interest toward the three core constituencies who have to come together in a flywheel to move forward,鈥� said Warburg Peters.听

Those three constituencies 鈥斅爐he incumbents, the investors, and the entrepreneurs 鈥斅爓orking together accelerates investment into the space essentially in a positive feedback loop, she said.

The Shift To Renting

Funding to property management companies, which includes companies that facilitate home buying and selling, could be accelerated by the pandemic and the effect it鈥檚 had on residential real estate, according to Warburg Peters.听

Single-family rentals in particular, is a growing market.

鈥淲e鈥檙e in the midst of A) meaningful growth of people wanting to rent those assets vs. own them and B) institutions wanting to move into that space,鈥� Warburg Peters said.

The process of managing a portfolio of single family homes is complex, so many tech companies have cropped up and focused on that, including , where Warburg Peters sits on the board.

鈥淣ow we鈥檙e moving into a world where people who could afford to aren鈥檛 going to live in homes they own for certain periods of their life because they want flexibility 鈥� they may then own homes purely as assets,鈥� Warburg Peters said. 鈥淎nd historically that would’ve only been available to institutional owners.鈥澛�

Going forward, Warburg Peters expects more investment in companies that deal with renting or tools around renting, whether they focus on single family rentals or not.听

鈥淚 think we鈥檙e going to see a continued momentum here,鈥� Wang said. 鈥淲e鈥檙e still in the early innings of this industry modernizing. Most of construction today is done in a super old school way, most property is managed in a super old school way, and most transactions in real estate are done in a super old school way. So there鈥檚 a lot of untrodden terrain for companies to be built and to grow.鈥澛�

Illustration: Li-Anne Dias