Private equity investments in proptech companies amounted to $741 million in 2021: Report

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Private equity (PE) investment in proptech companies grew 35% in 2021 to a record $741 million, driven by increased adoption of technology in the real estate sector, according to the latest report from the digital real estate platform owned by REA India .com.

The report revealed that the inflow of funds into proptech companies stood at $551 million in the calendar year 2020. The proptech industry in India received a total of $3.2 billion dollars of private financing between 2009 and 2021.

Investments tracked include private equity, venture capital, debt, PIPE (private investment in public entities), project-level investments and pre-IPO, early-stage private equity transactions. growth and advanced.

Private equity investments in proptech companies have grown at a CAGR of 55% since 2010.

Growing investor confidence has pushed the average deal size of proptech private equity investments to an all-time high of $25 million in 2021.

“The pandemic has definitely proven to be a crucial turning point for the proptech space in India. Like many other sectors, real estate has managed to capitalize on the digital acceleration seen during this period. The adoption of new technologies such as artificial intelligence and machine learning, virtual and augmented reality and blockchain have opened up new opportunities for startups in proptech,” said Dhruv Agarwala, Group CEO, Housing.com.

According to a recent consumer survey, 40% of potential buyers are ready to buy a property entirely online or after a single visit.

According to the research, tech companies doing sales and marketing, and providing building technologies, garnered 69% of the total $741 million in investments received in the last calendar year.

“We believe proptech in India will continue to grow, with the future anchored around key aspects such as efficiency, scalability, data-driven decision-making and sustainability. Technology adoption will

all stakeholders, as businesses will evolve at a much faster pace, improve the consumer experience, bring much-needed transparency and support faster decision-making,” said Agarwala.

The share of construction technology companies in total private equity investments increased to 36% in 2021, from just 4% in 2020).

Proptech businesses in sales and marketing earned 33% of total PE investment last year, up from a 13% share in calendar year 2020. Investments in sales and marketing businesses based on technology tripled in 2021 to $241 million, from $70 million the year before.

The share of proptech companies in co-working and co-living, in terms of investments received, fell to 14% in 2021 from 36% in 2020. The shared economy segment, comprising co-operators -working and co-living, experienced a 47% drop in fund inflows to 104 million USD in 2021 compared to 198 million USD in 2020.

The decline in investments in this category is mainly due to the negative impact of the COVID-19 pandemic. The numerous waves of infections and the resulting lockdowns, along with social distancing norms and working from home, have led to a drop in demand for co-working and co-living spaces, the report points out. .

Similarly, the share of interior design service companies in total PE inflow fell to 11% in 2021 from 32% in 2020. The share of the furniture rental segment in total investment is fell to 3% from 13% during the period under review. .

Investments tracked by Housing.com include private equity, venture capital, debt, PIPE (private investment in public entities), project-level investments and pre-IPO private equity transactions, at early, growth and advanced stage.

Latest trends show that while proptech segments such as sales and marketing continue to attract investor interest, the influx of private capital has increased significantly in construction technology amid rising input costs , as digitization helps achieve greater efficiency and increases cost savings. We anticipate that the next 5 years will bring significant investments in the modernization of the real estate sector in all segments,” said Ankita Sood, Head of Research at Housing.com.

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