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Investment In Real Estate Tech Companies Up 607% Year Over Year (But Only If You Count The We Company)

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Investor eagerness to put money into real estate tech companies reached new highs during the first quarter of 2019, according to a new report by CRETech.

Money Graph

Global investment in real estate tech companies spiked by 607% from Q1 2018 to Q1 2019 to $9.9B, the largest gain in real estate tech history, the report says.

Much of the gain, however, was the result of investment in coworking giant The We Company by Japanese investor SoftBank, which the report records as $6B during Q1. Most of that total — $4B — had been announced before the beginning of the quarter. 

Even without that $4B, an investment of $5.9B still represents a vast increase compared with Q1 2018, when total investment was about $1.6B.

The first quarter of 2019 saw another $1B-plus tech investment: South African internet conglomerate Naspers acquired the remainder of Avito for more than $1.1B. Avito is the Russian equivalent of Craigslist, claiming 10.3 million unique daily users, and Naspers had already owned part of it.

Other major investments in real estate tech in the first quarter involved OfficePad, Danke Apartment and home trading platform Knock. All together those three accounted for nearly $1.5B. 

Large real estate tech investment deals are becoming a regular occurrence, according to CRETech. There were nine "supergiant" venture rounds (raising $100M or more) reported in Q1.

Particularly hot is the market for early stage fundraising, Series A and greater, but that also means the market could be experiencing a turning point, the report says.

The next step for best-funded real estate tech companies will either be to graduate to public markets, or continue to raise capital to acquire startups in the sector before going public.