Funding in proptech firms falls 10% to $243 million in H1; crosses $4 billion since 2009

In the first half of 2023, funding for proptech firms experienced a 10 percent decline, totaling USD 243 million, according to a report by real estate technology firm Housing.Com. This decrease was attributed to global economic uncertainties, as compared to the USD 271 million invested in proptech firms during the same period in the previous year.

Housing.Com'sort also highlighted that the cumulative investments in proptech companies in the country have surpassed the USD 4 billion milestone since 2009, driven by the increasing adoption of technology in the real estate sector, particularly in recent years.

According to Housing.Com'sa, proptech funding reached USD 719 million in 2022, slightly lower than the USD 742 million recorded in 2021 and USD 551 million in 2020. In 2019, funding increased to USD 549 million compared to USD 527 million in 2018 and USD 206 million in 2017.

Prior to this, funding levels were as follows: USD 168 million in 2016, USD 127 million in 2015, and USD 203 million in 2014. The data also revealed that funding was only USD 51 million in 2013, which was significantly higher than the USD 15 million in 2012 and USD 9 million in 2011.

Furthermore, the data indicated that funding was recorded at USD 6.1 million in 2010 and USD 0.2 million in 2009.

Ankita Sood, Head of Research at Housing.Com, PropTiger.Com, and Makaan.Com, noted that while the number of deals in January-June 2023 decreased by 20 percent year-on-year, the average deal size increased by 12 percent in the first half of this year, highlighting the strong fundamentals of the market.

Sood stated, "Investors are diversifying their portfolios and displaying a keen interest in early-stage and mid-sized deals, indicating a growing appetite for innovative startups and specialized proptech solutions."

She also emphasized the rapid growth in construction technology in recent years, with real estate developers increasingly embracing technology to enhance operational efficiency, leading to increased investment in this segment.

However, Sood cautioned, "Looking ahead, while the sentiment remains optimistic, it is important to acknowledge the presence of certain downside risks due to ongoing macroeconomic challenges."

Commenting on the data, Sunny Garg, Co-Founder and CEO of property management app Crib, highlighted the traditional lag in tech innovation and adoption within the real estate sector but noted that the post-Covid landscape is witnessing rapid transformation.