Investors Maintain Confidence in Proptech Sector
Investor confidence in the proptech sector, as measured through a biannual survey conducted by venture capital firm MetaProp, is back on the rise after waning last summer. The Global PropTech Confidence Index rebounded to 8.0 after retreating to 7.7 six months ago from the all-time high of 8.8.
“To me, this period’s results demonstrate proptech’s resilience,” said Aaron Block, co-founder and managing partner of MetaProp. “Both proptech investors and proptech startups clearly believe that technology-led innovation will remain a growth engine and value driver for the real estate industry. I’m particularly encouraged by the investors’ consistent optimism.”
New York-based MetaProp conducts the survey in partnership with the Real Estate Board of New York and the Royal Institute of Chartered Surveyors. For the latest survey, MetaProp surveyed a record number of participants: 2,300-plus proptech investors and startup founders.
The latest survey shows investor confidence continuing to ride high behind robust deal flow, increasing M&A expectations and strong portfolio performance. Reflecting that optimism, 80% of investors responding to the survey said they expect to see either more acquisitions or about the same number of acquisitions in 2020 compared to 2019.
Forty-five percent of proptech investors plan to make more investments in 2020 compared to 2019, although that figure is down from an all-time high of 64% six months ago. Fallout from WeWork’s failed attempt to go public may be behind the drop, says MetaProp.
As the space begins to mature, more proptech startups have been stepping up their hiring and hitting elevated yearly revenue numbers. With startups continuing to flood in the market, consolidation will remain high, MetaProp says. An increasing sentiment in the ability to raise capital is met with concerns of bloated valuations from around the space.
“The Global PropTech Confidence Index shows continued strong investor interest in PropTech,” said Christopher Beach, REBNY’s CTO. “This report demonstrates that New York City remains a global hub for technology development and innovation, providing the solutions needed to address the challenges facing the real estate industry.”
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