A new study has found venture capital levels for proptech funding is returning to pre-pandemic levels with investments shifting from early-stage to mid and late-stage companies.
The study, conducted by Center for Real Estate Technology and Innovation, revealed in 2021 that $32 billion was invested in real estate tech companies, including commercial, construction, residential, multifamily, and other real estate sectors.
This level of funding is 28% higher than that of 2020. The global proptech think tank estimates an additional $7 billion of capital was injected into the real estate tech ecosystem this past year – mirroring closer to numbers previously seen in 2019.
In regards to investments by sector, almost half (49%) of global funding went to residential tech companies, while commercial received 7.6% of total funding. Multifamily and construction nearly split evenly the remaining amount of capital.
By stage, 36% of the $32 billion invested went to companies with Series D funding or greater – a sign of the maturing proptech industry overall. Another 31% went to Series C companies.
“Following a year of uncertainty, the venture capital and real estate tech entrepreneur market is back in a meaningful way,” said Ashkán Zandieh, founder and chair of CRETI. “The continued growth of the sector has seen new investors across multiple stages enter the market, including private equity groups and institutional organizations.”
With 2022 right around the corner, the industry is already making predictions on where massive waves of funding will crash next. Crunchbase news recently released a number of proptech companies it expects to go public and file for IPOs including rent-to-own Divvy Homes and full-stack lender Lower.
Proptech-focused venture capital firm Pi Labs recent analysis of mergers and acquisitions data showed that there have been 152 global proptech acquisitions so far in 2021, up from 92 in 2020 – the most global proptech M&A activity since records began.
“Prop tech investment is growing significantly year-on-year, as the real estate sector is increasingly aware of the operational performance gaps that have been unaddressed for a number of years,” said Pi Labs’ CEO Faisal Butt.
“On the back of the large wave of capital raised this year, and accelerated adoption within the sector, many prop tech companies are now achieving scale and we can expect later stage funding rounds and M&As to drive investment growth in 2022. Generalist VCs, particularly tech-focused Silicon Valley investors, are also now starting to get in on the action,” Butt added.