VC Investment in Proptech Exceeds Pre-Pandemic Levels: Report – Trade Observer

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Undaunted by inflation, supply chain problems and the start of another COVID-19 winter, venture capitalists invested $ 32 billion in proptech companies in 2021, a 28% increase in funding from 2020 and a 3.23% increase over 2019, according to a report released Monday.

The dramatic increase in proptech VC funding exceeded the previous all-time high of $ 31.6 billion in 2019, according to the “2021 Real Estate Tech Venture Funding Report”, produced by the Center for Real Estate Technology & Innovation (CRETI), a industry think tank and venture network.

According to the report, firms working in residential real estate accounted for the lion’s share of investments in 2021, with 49%, followed by 29% in multi-family.

Reflecting the maturation of the proptech industry, 36 percent of the $ 32 billion invested went to companies with Series D or higher funding and 31 percent went to Series C companies.

“Proptech is now a household name in both the public and private markets,” said Zach Aarons, co-founder and general partner of MetaProp VC. “The cat is out of the bag. The industry is truly global and adoption is accelerating very rapidly. We have certainly experienced some discontinuity in public equity markets as the sector reaches a maturity point and analysts realize that not all assets within the proptech sector should be valued equally. “

The report indexed and analyzed risk investments in the broader real estate sector, including commercial, construction, residential, multi-family and other asset classes and real estate services, including brokerage and management.

Throughout the year, the market continued to gain momentum in financing and showed signs of evolution as venture capital investments shifted from early stage to mid and late stage companies. The market also continued to put 2020 even further behind.

“After a year of uncertainty, the venture capital and real estate technology entrepreneurs market is back in a significant way,” said Ashkán Zandieh, founder and president of CRETI. “The continued growth of the sector has seen new investors enter the market in stages, including private equity groups and institutional organizations.”

And now 2022 will likely mark another record year.

“2021 was the year of validation and consolidation. Several categories have seen the making of SPACs and strategic acquisitions, “said Vincent Cicciarelli, vice president and partner of Lincoln Property Ventures, referring to the business via special purpose acquisition companies.” The cordial introductions are over and now everyone is off to the races in the main categories that have emerged “.

Philip Russo can be contacted at [email protected].

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