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Proptech Startups Are Poised To Join IPO Reawakening In 2024

Initial public offerings in the U.S. slowed to a dribble in the last two years, with companies avoiding an uncertain economic and financial landscape and instead coasting on funds raised in the bountiful year that was 2021. 

But now, with those funds running low and private financing sources clutching their capital, IPOs among tech — and proptech — companies are set for a rebound in 2024.


“Another wave of proptech IPOs is almost inevitable,” said Clelia Warburg Peters, managing partner at Era Ventures, a VC firm specializing in proptech. “I think the big question is about timing.”

Warburg Peters doesn't expect many proptech IPOs for the rest of 2023, but next year might be a new ballgame, as companies that didn't pursue offerings during the IPO slump are rethinking their strategy. 

IPOs as a whole slumped beginning in 2022, taking proptech with them. During the second quarter of 2021, the number of IPOs peaked at 118, raising a total of $40.7B, according to Renaissance Capital data. A year later, the number of IPOs had crashed to 21, raising only $2.1B, and until the second quarter of this year, activity remained muted.

During Q2, there was an uptick, with 23 offerings pulling in $6.6B. Unlike the previous wave of IPOs, however, most of the newer ones were in the industrial or consumer goods sectors rather than tech, according to KPMG, though food delivery app Instacart rolled out its IPO in the third quarter.

Proptech as an industry has suffered many of the same challenges as tech in general. But as real estate companies cut costs amid continued turbulence in the property markets, apps, software and AI have filled gaps where employees used to be.

“There are a lot of high-quality, late-stage growth companies waiting in the wings,” Warburg Peters said. “Many of them were smart. They raised money in 2021 as a result. A lot of money.”

Many of the companies that raised private capital in 2021 have been using the proceeds to rightsize their cost structure and slow growth to a more manageable pace, according to Warburg Peters.

“They've been trying to get into a position where the company would be more aligned with public market appetite today,” she said. 

In other words, they’ve been getting ready for the next big step: when the time is right, going public.

“A lot of those companies have really been hunkered down,” said Fifth Wall partner Sarah Liu, whose firm specializes in early stage investing in real estate tech. “Their focus has been on trying to extend their runway so that they can grow into the valuations that they last raised at in 2021 and don't have to raise again in a tough environment.”

That low profile has prepared at least some of them for public offerings, Liu said.

“I don't know that wave is the right word, but I do think that there are later-stage proptech companies that are nearing that point of readiness for the public markets,” Liu said. “They've been thinking about it, because it's unnatural for us to go two years without any IPOs.”

The more investors get used to a prolonged higher-interest-rate environment, the more likely IPOs will be, Liu said, adding that investors are already losing the feeling that if they just hold out a few more quarters, the environment will go back to the way it was before Federal Reserve rate hikes bit into everyone’s profit margins.


“Even now, we're seeing a number of those high-quality companies successfully raising bridge rounds and pre-IPO final tranches of private capital,” Liu said. “So the biggest question for those companies is where the price might go.”

Warburg Peters cited a number of strong proptech companies that could be ripe for IPOs, such as VTS, Roofstock and Veev, all of which have been successful at raising money privately. In September, Kin, which offers homeowners insurance on a direct-to-consumer basis, closed on a $33M Series D round and has raised $265M in equity so far.

Last year, VTS closed on its Series E funding round totaling over $125M, the largest round of capital the company has raised. Roofstock raised $240M in a Series E financing round, and Veev picked up $400M in Series D funding.

None of these companies replied to queries about the possibility of an IPO, though it is common for companies to stay mum about the prospect of going public.

“We've had a little bit of thawing on the IPO market,” said Shadow Ventures founder K.P. Reddy, whose company focuses on providing seed capital in the proptech and construction tech spaces.

The landscape has changed since the last IPO boom in 2019. The kinds of proptech companies that will do best in this climate are different from those of only a few years ago, Reddy said.

“The business model-focused companies raised a ton of money with the idea that if they had a business model disruption, they would grow into their valuation,” Reddy said, citing WeWork as the most obvious example. 

“But most of those business models are failing,” Reddy said. “They're not growing into their valuation. Nobody's interested in bailing them out, and nobody's interested in investing in them.”

The proptech companies that will do better — whether they go public or not — will be those offering genuinely new technology, Reddy said.

“Technical disruptors will be the ones growing in the future,” Reddy said. “The possibility for them going public eventually is there, but many of them will be acquired before they reach that point."

One third-quarter 2023 IPO, and one more directly pointing to green shoots for proptech IPOs, is the new listing on the Nasdaq Stock Market of Simpple, a proptech company based in Singapore. The company, which didn't comment on the listing to Bisnow, issued about 1.6 million ordinary shares for its IPO at $5.25 each in mid-September.

The company specializes in facilities management tech and told The Straits Times that it raised about $8.4M from the offering, which it will use for research and development and expanding into other markets.