Funding in proptech firms fell 10 per cent to $243 million in the first half of 2023 amid global economic uncertainties, real estate technology firm Housing.com said in a report on Friday.
Investment in proptech firms stood at $271 million in the year-ago period. Housing.com also noted that the cumulative proptech investments in the country since 2009 surpassed the USD 4 billion-mark, backed by tech adoption in real estate, especially in the last few years. As per the Housing.com data, funding in proptech stood at $719 million in 2022, lower than $742 million in 2021, and the same stood at $551 million in 2020.
In 2019, the funding was higher at $549 million compared to $527 million in 2018 and $206 million in 2017. Prior to that, the funding touched $168 million in 2016, $127 million in 2015, and $203 million in 2014. According to the data, the amount was just $51 million in 2013, higher than $15 million funding in 2012 and $9 million in 2011. The data also showed that the funding was recorded at $6.1 million in 2010 and $0.2 million in 2009.
Ankita Sood, head of research, Housing.com, PropTiger.com, and Makaan.com, said the number of deals fell by 20 per cent year-on-year during January-June 2023, but the average deal size is up 12 per cent in H1 this year, underscoring the robust fundamentals of the market.
"Investors are diversifying their portfolios, showing keen interest in early-stage and mid- to small-sized deals, indicative of a growing appetite for innovative start-ups and specialised proptech solutions. "Focus on construction technology, in particular, has been growing at a phenomenal rate in the past few years," she said. Sood said real estate developers are actively embracing technology to enhance operational efficiency, which is evident in the investment inflow for this segment.
"Going forward, while the sentiment remains optimistic, it is important to acknowledge the presence of certain downside risks, given the ongoing macroeconomic headwinds," she cautioned. Commenting on the data, Sunny Garg, co-founder and CEO of property management app Crib, said, "The real estate sector has traditionally lagged in tech innovation and adoption. However, the post-Covid landscape is witnessing rapid transformation."
"There's a significant potential for tech-driven solutions in real estate, a fact not lost on investors. "Consequently, there's a growing interest in investing in proptech companies that offer innovative solutions to streamline processes, elevate customer experiences, and introduce positive disruptions in the industry," Garg said.