PropTech Explained

PropTech is a term that has become ubiquitous in the real estate tech and investor space. But what does it mean?

PropTech is a broad-based term for innovative, technology-enabled and technology-based solutions focused on transforming the buying, selling, developing, managing and operating of real estate assets.

The term encompasses technology solutions for residential real estate, commercial real estate, construction, real estate fintech, smart cities and the built environment. In some cases, it overlaps with the sharing economy; contech (construction tech), and fintech.

The rise of this industry considers the need for a technological and mental change required of the real estate sector to address the inconveniences of its consumers.

Real estate is the largest asset class in the United States, and as a result, new trends are emerging across the industry.

From teamwork to agriculture, the real estate market innovates and shapes its endeavors to meet demand. Since 2014, the PropTech segment has experienced remarkable growth.

Venture capital investments started at $ 186 million worldwide in 2011 and grew to $ 2.67 billion by 2016 and $ 12 billion in 2017, according to a report from RE: Tech.

Recently, the mid-2018 Proptech Global Confidence Index from MetaProp found that “Ninety-six percent of investors plan to make the same or more PropTech investments over the next 12 months; this is 76 percent more than the previous year.” Interestingly, an increasing proportion of these investments are directed towards companies in their growth stage.

PropTech segment analysis is a simple and complex task when you consider the many ways in which startups use technological innovations to disrupt the real estate industry. Without claiming to be exhaustive, let’s mention for example the use of artificial intelligence by, beacons by Smart Service Connect, smart home viewing booking tools by Front Door, blockchain technology by Ubitquity, virtual reality by Matterport, augmented reality by Datrix, or data visualization by Others are using connected objects, 3D printing, mobility technology, big data, etc.

Consequently, most startups fall into one of two major categories:

1. Startups that provide support to real estate professionals, such as tools to improve their services or productivity.

2. Startups proposing replacement real estate professionals.

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Written by Toqa Emad

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