The Edge - Volume One

PropTech 2.0

WHAT IS PROPTECH? Short for Property Technology, PropTech refers to the myriad of startups and new technologies cropping up in response to decades of inefficiencies and antiquated processes in the real estate industry. PropTech is where technology and real estate come together to propel the industry forward, and it includes technology that impacts the entire real estate value chain – from dirt to disposition.

Venture capitalist (VC) interest in real estate property technology (or PropTech) has grown significantly over the past five years. According to PitchBook data, the number of VC investments in real estate technology startups and early-stage companies more than doubled between 2013 and 2017. The value invested in PropTech deals nearly quadrupled over the same time period – from $523 million in 2013 to just shy of $2 billion in 2017. CB Insights estimates that approximately $5 billion has been invested in PropTech in the past two years1. The growing excitement in the sector creates opportunities, but it also has potential downsides. The fervor on the funding side can improve the chances of quality products being brought to market, but the sudden competition among VCs can lead to money chasing and weaker ideas that don’t merit the same time and support.

ADAM STANLEY Global CIO and Chief Digital Officer adam.stanley@cushwake.com

1 MIPIM News. “MIPIM Review: 2018 Will Be the Year of PropTech,” GlobalRealEstateExperts.com (Accessed September 25, 2018).

* All dollar amounts listed are in USD.

59