This is a question we are often asked at The Proptech Connection (The PTC). The answer is simple, but also complex. Simply, it’s a catch all term that describes technology that impacts space. The complex answer is that its constantly changing, reflective of the nature of real estate.

Globally, the demarcation of traditional real estate sectors is being eroded. COVID accelerated this: homes being used as offices, the hotel-isation of office through offerings in amenity-centric assets and the tentative steps into a digital world; just three such examples illustrating this. This has meant that the number of technologies applicable to real estate has increased. The Proptech concept thus encompasses tech categorisations like Contech, Fintech, Mobility, ClimateTech, SMART buildings, Generative AI, and numerous other terms. Thus, Proptech is an ever-expanding and evolving term.

Macro in brief

The Proptech ecosystem is a complex tapestry of technological capability and geographical dispersion. What is clear is that each region has a different focus or strength. For example, Europe has the highest percentage of companies focusing on ESG and CRE, much driven by generous funding opportunities from the EU. Israel has a very rich start up ecosystem, and much of their Proptech is cyber- or construction-focused. India has a Proptech ecosystem, with excellent software capability, focusing on residential.

We at the PTC have identified about 18,000 companies, up from about 15,000 companies in 2019. This number we forecast will continue to increase, driven by companies seeking tech to leverage their foundational digital projects, and the speed at which new technologies are being developed, giving rise to new opportunities.

There has certainly been a walk back in capital markets for VC investment within tech, alongside Proptech. Notwithstanding, the Proptech market is still very buoyant with many active venture funds and the rise of a new wave of CVCs, bolstered by significant funds and wider mandates for the leading global solutions. There are also many PE funds, generalist VC funds, and a significant number of family offices who – although perhaps being more selective – are still very active.