Over the past decade the real estate industry’s adoption of emergent PropTech has shifted gears to meet the demands and expectations of the global population boom and an ever-changing market. According to Global News Wire, the PropTech market is predicted to be valued at U.S. $86.5 Billion by 2032, indicating just how necessary these technological enhancements are for the market. The US PropTech market is expected to grow at a rate of 16% through 2032 while China’s industry will experience an impressive 23.7% growth. Japan also shows promise with 26.5% growth projected over this period, primarily due to its heavy reliance on eCommerce platforms like Amazon Prime and eBay.
A report by the investment bank Keefe, Bruyette, & Woods noted that a record $4 billion of VC equity funding flooded the PropTech field in the first quarter of 2022, hitting an all-time high. This was an increase of 41% compared to the fourth quarter of 2021, and a 31% increase from last year. These impressive statistics followed a record year for Proptech fundraising, when VC investments in the sector totaled $11.7 billion.
The number of PropTech startups has increased exponentially largely because of governmental work-from-home legislation and the real estate sector’s desire to remain relevant in this new climate. “Artificial Intelligence”, “disruption”, and “virtual reality” are buzz words when it comes to expressing how far PropTech has come in terms of technological progress.
“The real estate industry is not immune to technological upheaval, and the global real estate sector has gone through a significant paradigm shift”, explains Built Up Ventures (BUV) Managing Director Zev Steinberger.
BUV by Besadno is a fund that specializes in early-stage, innovative, Israeli property and construction technology (Proptech and Contech). Several of their portfolio companies are making significant global contributions in PropTech and ConTech. We turned to the Tel Aviv and New York-based venture capital firm to understand the scope of opportunities that exist today for potential investors, and to ascertain which leading PropTech companies we should keep our eyes on in 2022-23.
“There is a growing acceptance of technology integration into the real estate market today. The demand for PropTech is high, as it lowers operational costs and helps developers and agencies save money. Customers are provided with digital/virtual services, lowering overheads, and boosting efficiency and satisfaction. As a result, profitability and productivity rises”, explains Steinberger.
MyTower is one such example. The company provides a full service, innovative online platform for property managers and tenants. Services include a residents’ app, on-demand concierge services, and smart building solutions such as proactive and preventive maintenance, and facilities and personnel management.
“$24 trillion of assets are still managed by using disconnected systems and printed spreadsheets, an incomprehensible reality in 2021” explained Steinberger. “The most interesting advantage associated with integrating PropTech solutions was the overwhelming improvement in tenant retention”.
MyTower enables clients to manage their property efficiently with full control and transparency, while saving close to 50% on their operational costs. Currently, over 250 leading residential towers in Israel are managed by MyTower and they have secured a significant footprint in Poland as well.
Okibo’s autonomous, intelligent, robots reduce construction costs and increase efficiency. Using advanced computer vision, laser detectors, geo-positioning, and inertial motion sensors, they can be easily integrated into any construction site. They perform tasks that were previously performed manually or with limited-function machinery at up to four times the speed.
“Today, the investor who seeks to invest in a particular sector such as Property Tech, still seeks a variety of innovation. Augmind provides augmented reality for real estate, Xtate features automated AI-based social media advertising for realtors, and SkySaver is an emergency evacuation solution for high-rise buildings. As you can see, the innovation coming out of Israel is endless and remarkable” explains Steinberger.
BUV maximizes deal flow by offering access to the best innovative Proptech and Contech startups that Israel has to offer at the university, incubator, and accelerator levels.
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