Deal Momentum Cautiously Builds At The Nexus Of AI And Real Estate

Artificial intelligence • Public Markets • Real estate & property tech • Startups • Venture

Deal Momentum Cautiously Builds At The Nexus Of AI And Real Estate

March 31, 2025

Joanna Glasner

Real estate is often the largest asset people own. But when it comes to venture investment, giant bets in the space often don鈥檛 work out.

The list of failures and underperformers from the frothy investment period a few years ago includes many exceptionally well-funded real estate plays. Examples include , ibuyers such as and , and construction industry disruptors like and .

More recently, as investors put dry powder to work at the intersection of artificial intelligence and real estate, we鈥檙e seeing a less capital-intensive dynamic play out. Deals are getting done, but rarely at unicorn valuations.

So far this year, a little more than $200 million has gone to startups applying artificial intelligence to real estate-related sectors like property management and construction, per 附近上门 .聽 Investment is on pace to exceed last year but remains below prior highs, as charted below.

Funded startups from the past year are a varied lot, spanning sub-sectors including rental management, drone-delivered site inspections, and building energy efficiency.

The largest funding recipient of the past year, New York-based , raised $75 million last summer for an automation platform for the housing and healthcare industries. Its AI-enabled property management tool handles tasks such as rental inquiries, tour scheduling, maintenance requests and other routine tasks.

More recently, Santa Monica, California-based landed $60 million in a March financing to provide drone aerial inspections for use cases including construction and building management.

Montreal-based was another strong fundraiser, securing $55 million this month to scale a system that connects a home鈥檚 energy devices to smart grids and energy markets.

We鈥檙e also seeing a sizable pipeline of smaller rounds. Among companies funded this year that straddle AI and real estate, the median round was about $4 million.

Deliberately smaller

Commonly, we see reductions in total funding and smaller average round sizes as a sign of pessimism around a sector. For real estate, however, there鈥檚 a case to be made that venture investors still like the space, just not many of the capital-intensive business models popular during the boom years.

鈥淚t frustrates us to see dollars improperly allocated to our sector,鈥� said , managing partner at , an early-stage venture firm largely focused on real estate and construction.

Yet while onetime unicorns in i-buying and other real estate-adjacent areas may have faltered, Myers said he鈥檚 enthusiastic about deal flow in other emerging areas, in particular tools that add much-needed efficiencies in areas such as construction, real estate sales and building management.

For the time being, he said, 鈥渢here鈥檚 more demand for solutions than supply of good solutions.鈥�

The firm鈥檚 most recent investment along these lines was a $4 million March seed round for , an AI-powered real estate leasing agent. It鈥檚 also active on the building side, including participating in a $13.5 million Series A investment last year for , which develops software for sharing information between the office and field in construction projects.

In addition to seeing strong demand for AI tools, per Myers, another advantage is that founders are able to use AI in product development to get to market faster and more cheaply than previous generations of startups.

Exits

While the pace of large startup exits has picked up in recent weeks, real estate-related companies haven鈥檛 been among the participants.

That said, we did see a unicorn-scale IPO by one major player with ties to the space 鈥� home service contractor platform 鈥� in late 2024. Although down from their highs, shares have held up pretty well, with the Glendale, California-based company recently valued around $8.5 billion.

Looking ahead, there鈥檚 certainly no shortage of massive real estate-related revenue streams for startups to tap into. In fact, with on the rise, rents to all-time highs, and home maintenance costs , one could argue that opportunities have never been bigger.

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