Venture capital activity in real estate is accelerating the development of the built-world tech marketplace.
Commercial real estate has had a long-standing reputation for being desperately behind today’s technology-driven world, with its functions lagging behind other sectors’ technological development and progress.
However, over the past 10 years, the rise of the entrepreneurial class within real estate, fuelled by venture capital investment, has generated a new global real estate tech movement, that is not only changing the perception of the real estate industry but has the potential to transform it.
The real estate tech industry is so new that one established market definition is yet to be determined. Here, we have chosen to report on the ‘built-world tech’ market. Others refer to it as ‘PropTech’ (property technology).
The explosion of real estate technology in the market has left many in the industry overwhelmed with choices and with no clear understanding of the benefits of embedding the technology that is available.
In Venture capital funding points to the hottest concepts in built-world tech (pdf), EY, together with CRETech, a leading thinker on built-world tech, aims to demystify this emerging market. We provide insights on where investment is flowing; on current trends; on front-running start-ups by capital investment; and we outline some of the challenges to real estate adoption.
Below is a summary of our report, which can also be found in full in the resources section on this page.
The evolution of ‘built-world tech’
Since 2015, US$75.2b has been invested in built-world tech by a venture capital (VC) community that has identified real estate as a lucrative opportunity for technology. In the first three quarters of 2019 alone, US$24.6b has been invested by VCs, making 2019 a record year for VC investment.
This highlights the fast-growing interest in the emerging built-world tech sector and the need for real estate owners to understand how the market is developing and providing opportunities to transform the sector.