Investors Have Pumped A Record $9.5B Into Proptech This Year
Commercial real estate firms, digging for insights into how to bring bodies back into offices, shops and more, have helped spur a record fundraising year for the booming proptech industry.
Investors pumped $9.5B into proptech from January through mid-November to help meet the demand for real estate technology, according to data firm CB Insights. That surpasses the $9B invested in 2019, previously the high-water mark for proptech, The Wall Street Journal reported.
It isn't just venture capitalists that have invested in proptech. As startups in the industry have begun to mature, commercial real estate companies have increasingly taken notice and started to invest, Bisnow reported in June.
That means firms that historically focused on brokering deals or investing in real estate are now getting in on the tech startup action, including Cushman & Wakefield, CBRE, PGIM Real Estate, Essex Property Trust, MAA, UDR and Greystar.
Real estate firm JLL also made a splash in the industry last month, announcing plans to buy Boston-based startup Building Engines for $300M. JLL said in an October press release the proptech firm uses a cloud-based building operations platform to improve buildings' net operating income.
"Building Engines joining JLL represents JLL’s continued commitment to technology leadership and bringing the best technology to our investor clients," JLL Technologies President Sharad Rastogi said in the release.
Newer firms are benefiting as well. Keyway, a commercial sale-leaseback platform for small and midsized businesses, announced $15M in seed financing this month, led by Canvas Ventures.
Juno, a startup that aims to standardize the design and construction of buildings to speed up the development process, also raised $20M in September in its Series A funding round. The startup's founders told Bisnow that the new money will help the company scale faster and pursue larger partnerships.
The large investments made this year propelled a strong swing of the pendulum after a difficult pandemic year for proptech in 2020.
Though startups like smart lock company Latch and residential sales platform Opendoor have managed to debut with impressive IPOs over the last year, several proptech startups saw revenues decline as property owners looked to save money during the pandemic.
CB Insights anticipated the pent-up demand last year, noting the first quarter of 2020 actually set a new funding record. The industry finished last year with $8.1B in raised capital, down 11% from the previous year.