Proptech fundraising hits $9.5B record

Venture capitalists and investors surpassed 2019’s $9B high


Turkeys haven’t yet hit ovens, but this year’s investments in the proptech sector have already broken the industry’s record.

The sector received $9.5 billion from investors and venture capital as of mid-November, according to CB Insights data reported by the Wall Street Journal. That figure breaks the record previously set two years ago, when $9 billion was raised in 2019.

The record fundraising also marks a rebound from 2020, when the pandemic forced some landlords to turn away from proptech desires for cost-cutting needs. Only $8.1 billion was raised last year, an 11 percent decline from 2019, according to CB Insights.

There are multiple factors bringing proptech investors back to the table. Technology is an increasingly attractive asset for landlords and tenants looking to provide efficiency and security for office occupants returning from the pandemic. Proptech investors can see high returns on low interest rates and commercial real estate sales are through the roof as owners plot a post-pandemic future.

Proptech fundraising rounds are seemingly everywhere.

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Commercial real estate data crowdsourcer CompStak said earlier this month it raised $50 million in a recent fundraising round. The firm previously raised about $14 million in a Series B round in 2019. Its Series C fundraising, led by Morgan Stanley Expansion Capital, will help scale product and marketing teams, as well as roll out new products.

In August, Divvy Homes raised $200 million in equity financing, bringing the company’s valuation up to $2 billion. The startup helps renters become homeowners by buying homes and charging rent while allowing customers to save towards buying the homes themselves.

Beyond fundraising, Proptech M&A is also having a banner year. As of the end of August, there had been transactions totaling more than $18 billion in 2021, setting the sector up to easily surpass the $21.9 billion of M&A transactions in 2020.

[WSJ] — Holden Walter-Warner