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PropTech Investment 2017: Slower Than 2016’s Unicorns?

POSTED BY   Will Darbyshire
January 20, 2017

I’m hearing a lot, through articles and conversation, that 2016 was a particularly great year for PropTech, especially in terms of the investment that the industry received. But after the success in 2016, let’s look at what PropTech investment 2017 has to offer.

PropTech Investment 2017 – More Unicorns?

Collectively, real estate tech companies increased their funding by 40% in 2016. Not only that, but we also saw an unprecedented four PropTech companies transform before our eyes into ‘unicorns’. Compass, Homelink, SMS Assist and OpenDoor Labs all found themselves valued over $1 billion.

In 2016, real estate tech industry grew in terms of both deals and dollars, just as it has every year since 2012. In those 4 years, PropTech companies have raised around $6.4 billion in funding across 817 deals. To see 4 companies reaching $1billion in 2016 alone is quite remarkable.

Will PropTech investment 2017 follow the pattern?

Courtesy of CB Insights

This is heady news, and for all of us in and around the industry, it could be an exciting indicator of what awaits in the coming months. However, without wanting to be a party-pooper, I have slightly more modest predictions for what PropTech investment 2o17 will offer up.

without wanting to be a party-pooper, I have slightly more modest predictions for #PropTech in 2017Click To Tweet

Firstly, we are unlikely to see the industry match or surpass 2016 investment numbers. This is partly because the Series B fundraising round for Chinese company, Homelink in Q2 ‘16 (worth an astonishing £926 million) pushed last year’s investment figures to unattainable heights.

Surgical Investment

We might not be set to see anything quite as gigantic as that this year, but I do predict that in PropTech investment 2017 will see more, smaller deals being completed; smart investments in niche tech companies, especially in areas such as robotics, augmented reality and AI.

But one cannot ever be certain. There is a chance that 2017 will see some enormous investment deals, in which case I’ll have egg on my face. Therefore, for the purposes of saving face, let me add one, quite large caveat to my previous statement: If Europe and the UK, either individually or collectively, start to invest in their real estate tech companies in the manner that they are being advised to do, we could see a gathering of momentum leading to some big fundraising rounds.

2016 was a big year; one which saw some remarkable goings on in PropTech. The amount of money being passed around was greater than we’ve seen before, but we shouldn’t get carried away and expect even more growth this year. It will be equally, if not more exciting, though, as we see surgically precise investment into the high-end tech that promises incisive disruption of the real estate industry.

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