Research

SUMMARY FINDINGS

• The Mid-Year 2024 Global PropTech Investor Confidence Index is 6.3 out of 10, consistent with the 6.5 Year-End 2023 score. This reflects a cautiously active investment climate and a continued flight to quality. 
• The Mid-Year 2024 Global PropTech Startup Confidence Index is 4.3 out of 10, down from 6.1 at Year-End 2023. This decrease reflects the persisting challenges in fundraising and exit conditions for startups. Despite this, we continue to see capital awarded to quality assets and promising new starts as the ecosystem experiences a shakeout. 
• 48% of PropTech investors expect to maintain their investment pace over the next 12 months. 
• 35% of founders reported that a Pre-Seed round was their most recent financing stage, up from 18% six months ago. This reflects the significant recycling of talent and new company formation throughout 2024.
• 70% of investors anticipate more M&A in the coming year, indicating a continued expectation of industry consolidation.

SUMMARY FINDINGS

• Investor Confidence is 6.5 out of 10, modestly up from 6.1 at Mid-Year 2023. This underscores a careful and deliberate eagerness from investors to re-engage with the market.
• 43% of investors expect to make more PropTech investments in the next 12 months, echoing sentiment from Mid-Year 2023 and up significantly from 26% at Year-End 2022. 48% of investors expect an uptick in deal flow over the next 12 months, up from 39% six months ago and a significant increase from the all-time low of 19% at Mid-Year 2022.
• From an innovation perspective, 41% of investors are most interested in solutions for multi-family, the highest of any asset type. Notably, investor interest in office solutions drops to 8%, a low not seen since Mid-Year 2022.
• Startup Confidence is 6.1 out of 10, up from 4.8 at Mid-Year 2023, marking the third consecutive increase in startup confidence from the all-time low of 4.2 recorded in Mid-Year 2022.
• While startups expect it to become easier to raise capital, they continue to recognize investors' focus on strong fundamentals. 35% of startup founders believe it will be easier to raise capital, up from 22% in Mid-Year 2023 and a notable shift away from the all-time low of 5% at Mid-Year 2022. 29% of startups are targeting a modest 1-2X sales growth target over the next year, in line with 27% at Mid-Year 2023 and 22% at Year-End 2022.

SUMMARY FINDINGS

• Investor Confidence is 6.1 out of 10, modestly up from 5.4 at Year-End 2022, marked by a nuanced shift in disposition and now echoing cautious optimism. 
• 43% of investors expect to make more PropTech investments, up significantly from 26% at Year-End 2022. 39% of investors expect an uptick in deal flow, in line with Year-End 2022 and up from the all-time low of 19% at Mid-Year 2022.
• 34% of investors stated they are more interested in AEC than any other category, the highest on record for the index. This interest tracks the growing maturity of the sector’s technology paired with an increased willingness from stakeholders to adopt technology to help address rising challenges in controlling project costs and securing skilled labor.
• Startup Confidence Index is 4.8 out of 10, a modest increase from 4.4 at Year-End 2022 and a continued uptick from the all-time low of 4.2 recorded at Mid-Year 2022. 
• 77% of investors, an all-time high, expect to see more M&A activity in the next 12 months. Similarly, 60% of startups express an increased likelihood of experiencing a liquidity event in the next 3 years—an increase from 54% recorded six months ago.

TOPICS INCLUDE:

• Sources of emissions across the building lifecycle
• Embodied vs. operational carbon
• Technology solutions addressing emissions, including:
  1. Design and material selection (incl. life cycle assessments, environmental product declarations, etc.)
  2. Alternative building materials (incl. low-carbon cement, low-carbon steel, mass timber)
  3. Resource efficiency (incl. energy, water, waste)
  4. Electrification and decarbonization
  5. Tracking and reporting

• Incumbent discussion throughout

SUMMARY FINDINGS

• Investor Confidence is 5.4 out of 10, with 71% of investors expecting to make more or the same number of investments, down from 88% in Mid-Year 2022. Notably, today's investor outlook is in line with the pullback we saw at the outset of the COVID-19 crisis in Mid-Year 2020. 
• Startup Confidence is 4.4 out of 10. This represents a minor increase from 4.2 at Mid-Year 2022 and marks a significant drop from the record high of 8.3 at Mid-Year 2021, signaling stabilization but at a much lower level. 
• 38% of investors expect to see an increase in deal flow in 2023 -  up from 19% at Mid-Year 2022 - as startups continue to report tightening runways. 
• Startup founders are modestly more optimistic about the fundraising climate than they were six months ago. 57% of startup founders anticipate that it will be more difficult to raise capital in the coming 12 months, which is down from 71% at Mid-Year 2022, but up from 20% at Year-End 2021.
• Both founders and investors continue to anticipate an uptick in industry consolidation over the next 12 months. 

SUMMARY FINDINGS

In 2022, the generative AI landscape began to form as commercial access to the models became available and new techniques introduced applications for image generation, code generation, protein sequencing and more. Large language models will continue to enable new waves of research, creativity, and productivity by facilitating the generation of complex solutions for some of the world's most challenging problems, across a broad range of industries and enterprises.

As the performance, speed, and affordability of AI models continue to improve and model access becomes more accessible via free and open-source platforms, the stage is set for an unprecedented surge of creativity and innovation resulting in add-on features to existing products and an explosion of new companies building generative AI applications for specific verticals. 

In this thought leadership piece, MetaProp outlines the specific impacts Generative AI will have on the real estate industry with a sharp focus on on marketing applications, conversational interfaces, and search capabilities. 

SUMMARY FINDINGS

• Public and private institutions are addressing the lack of standardization and transparency in ESG definitions and practices, often selecting ESG values that align with their core mission and corporate strategy.
• Successful ESG policies are built around a firm-wide ESG “north star” and integration of ESG experts and champions into every aspect of the business.
• Thus far, Real Estate owners and operators are integrating ESG practices into their business operations, portfolios and investment philosophies by investing in asset classes that have inherent “social” value and reducing portfolio carbon emissions.
• The majority of ESG fund managers that were interviewed were confident that ESG can be a value creator and does not imply concessionary returns for their funds.
• While nearly all VCs interviewed had an ESG investment vehicle, little progress has been made within Venture Capital to monitor or track ESG performance of portfolio companies after the due diligence has been completed and the investment made.

SUMMARY FINDINGS

SUMMARY FINDINGS

• 62% of investors expect to make the same number of PropTech investments over the next 12 months. This is a departure from the last Index in which 71% of respondents expected to make more investments.
• 71% of startup founders believe that it will be harder to raise capital in the coming 12 months, up from 27% six months ago.
• 52% of startups have stated that without raising additional capital, they have less than 12 months of runway.
• 35% of investors are interested in investing in startups that impact the multifamily industry, a record high for the category. Conversely, only 10% of investors are interested in investing in startups that impact the office industry, a record low for the category.

SUMMARY FINDINGS

• Investor Confidence once again hit a record high of 9.3 out of 10, which was previously recorded in Year-End 2020.
• Startup Confidence has declined from its all-time high of 8.3, recorded in Mid-Year 2021, to a more modest 7.4.
• 71% of investors expect to make more PropTech investments over the next 12 months, up from 54% six months ago.
• 73% of startup founders believe that it will be harder, or the same level of difficulty, to raise capital in the upcoming 12 months, up from 58% six months ago.
• Investors expect to invest in at least 8 startups in the upcoming year, a record high for the Index.
• 25% of startup founders expect to hire 20 or more full-time employees in the upcoming year, the highest level we have seen since the Index began in 2016.

SUMMARY FINDINGS

• Investor Confidence remains strong at 8.9 out of 10. This is the second-highest investor confidence recorded
• Startup Confidence has reached its highest level on record at 8.3 out of 10. This is almost double the startup sentiment at Mid-Year 2020
• 91-percent of founders believe that it will be easier to raise capital during the next 12 months, the most confidence we’ve seen since the Index began in 2016
• 54-percent of investors expect to make more PropTech investment over the next few months, up from 33-percent a year ago

SUMMARY FINDINGS

• Investment into and utilization of smart building technologies are influenced by sustainability goals, cost savings, and more recently, new revenue generation.
• Most technology being implemented is a point solution for individual buildings and in the pilot stage.
• Some owners are on the sidelines waiting for leaders to emerge while others are attempting to improve operations without technology.
• Occupiers increasingly care about their space utilization, productivity, and attracting and retaining talent. They are seeking more control and transparency over their space.
• The most innovative real estate operators are beginning to scale technology across their portfolios.

SUMMARY FINDINGS

• China’s development of PropTech is still slightly behind that of the US. However, China’s cutting-edge approach to retail, e-commerce, and mobile payment has unlocked its potential for PropTech growth.
• The rise of PropTech in China is triggered by the slowdown in the real estate market, the prevalence of mobile internet, and the government’s push for innovation.
• In the short term, the Chinese PropTech industry will likely continue to follow the path of the US. 
• In the areas of consumer-facing PropTech, physical retail innovation, and 5G-related applications, China’s startups may lead the world.
• Even though China has a unique startup ecosystem, many PropTech startups have the potential to build cross-border businesses with the right approach.

SUMMARY FINDINGS

• The Investor Confidence Index is 9.2/10, a record high, up from a previous ceiling of 8.8 in mid-2019 and fueled partly by the momentous performance of PropTech companies in the public markets in the second half of 2020. 
• The Startup Confidence Index is 7.7/10, the highest recorded level to date. The acceleration of the adoption of technology in Real Estate caused by COVID-19 has created new opportunities for existing PropTech companies, as well as an environment of innovation and growth.
• 94% of investors believe that the pandemic will further accelerate the adoption of PropTech in the real estate industry, up 5% from mid-year 2020.

• 39% of startups say it will be easier to obtain venture capital funding over the next 12 months compared to the previous 12 months, a dramatic increase from an all-time low of 12% during the middle of 2020.

SUMMARY FINDINGS

• The Investor Confidence Index is 5.9/10. Although at a four-year low, investors agree that COVID-19 will accelerate the adoption of PropTech within the real estate industry, setting the stage for brighter days ahead.
• The Startup Confidence Index is 4.7/10, with founders’ expectations to raise capital being low, as well as scaled back sales growth targets across most of the industry.
• 89% of investors and 84% of startup founders believe that COVID-19 will accelerate the adoption of PropTech in the real estate industry.
• 33% of investors expect to make more PropTech investments over the next 12 months compared to the previous 12 months

SUMMARY FINDINGS

• The Investor Confidence Index is 8.0/10, falling from an all-time high of 8.8 at Mid-Year 2019 but still up from 7.7 a year ago.
• The Startup Confidence Index is 7.2/10, decreasing minimally from a 7.3 at Mid-Year 2019 and remaining steady over the last couple of years.
• 16% of the Startup respondents are founded by females, an all-time high and double the number at Year-End 2016
• 86% of Investors said that PropTech companies in their portfolio are currently performing above expectations or meeting expectations in terms of customer growth.
• 34% of Startup respondents had $1+ million in total annual revenues in 2019, up from 24% a year ago

SUMMARY FINDINGS

• 60% of PropTech Investors plan on making more investments in 2019 compared to 2018, an all-time high and up from 46% six months ago
• 46% of CEOs said it is either likely or very likely that their company will be acquired, go public or have a major liquidity event compared to 28% in Mid-Year 2018
• 32% of Startup CEOs forecast five times growth in 2019, up from 24% in Year-End 2017
• The average number of PropTech investments increased to 5.0 in Year-End 2018, up from 2.7 in Year-End 2017
• 90% of Investors expect to see the same amount or more pitches from startups in 2019, compared to 2018

SUMMARY FINDINGS

• Investor confidence is at 8.8/10, leaping to an all-time high and up from a 7.7 at Year-End 2018
• Startup confidence is at 7.3/10, increasing from 7.0 in Year-End 2018 and matching an all-time high from two years ago.
• 64% of PropTech Investors plan on making more investments over the next 12 months compared to the previous 12 months, an all-time high and up from 46% a year ago
• 100% of Investor respondents expect to see either more pitches or about the same number of pitches from PropTech companies over the next 12 months, up from 90% at Year-End 2018

SUMMARY FINDINGS

• 96% of investors are planning to make either the same number or more PropTech investments in the next 12 months compared to the previous 12 months, up dramatically from 76% a year ago.
• 57% of investors are expecting to see more pitches in upcoming 12 months, down from 76% at year-end 2017.
• 36% of PropTech investments are exceeding expectations in terms of customer growth, up from 21% year-end 2017 and from 12% two years ago.
• 44% of startup CEOs said their company has been operating for at least three years, a major increase from 30% just six months ago. 

REPORT SUMMARY

"An Introduction to PropTech in China" is a research paper published by MetaProp and Columbia University's Center for Urban Real Estate (CURE). The research findings delve deep into the dynamic growth of PropTech startups and venture capital activities in China.  

SUMMARY FINDINGS

• 76% of Investor respondents expect to see more M&A activity in the upcoming 12 months compared to the previous 12 months, up significantly from 57% in Q4 2016
• 24% of Startup respondents reported between $500K - $2M in total revenue to date, a major increase from the 9% that fell in this revenue range in Q4 2016, indicating high revenue growth and rapid startup maturation

SUMMARY FINDINGS

• Respondents to the survey increased by 175% from Q2 2017 to Q4 2017.
• 86% of PropTech startup CEOs expect their space to be more competitive in 2018, compared to 2017, up from 76% in Q2 2017. 
• 76% of investors are expecting to see more pitches from PropTech companies in 2018, compared to 2017, up from 62% in Q2 2017.
• 31% of investors are making investments past the Series A level, up from 19% in Q2 2017. 
• 48% of startup CEO survey respondents are headquartered outside the United States, an all-time high, up from 30% in Q2 2017 

REPORT SUMMARY

This report highlights the trends influencing the transformation of the modern work environment and the technology being adopted to turn buildings into smart offices. 

The most dynamic organizations are witnessing real benefits today from the thoughtful implementation of smart office environments. Whether it is owner’s capturing higher rents and occupancies or corporations being able to attract the best new talent it is clear that pressure will continue to build on non-adopters. 

Dan Fasulo, Research Executive in Residence, MetaProp

REPORT SUMMARY

How Technology is Creating the “Smart Parking Garage”

This white paper highlights how “GarageTech”’s assault on this real estate asset class is rapidly changing every aspect of the business, from development to operations to final valuation.

SUMMARY FINDINGS

• Overall, the Q4 2016 Investors’ Index was 8.2, up from 8.0 in Q2 2016, while the Q4 2016 Startups’ Index was 6.6, up from 5.4 in Q2 2016. 
• 92% of PropTech investors expect to match or exceed the number of investments in 2017 compared to 2016, demonstrating confidence in the growing PropTech sector. 
• 57% of investors expect to see more M&A activity in 2017, as recently seen in the VTS-Hightower merger, which many consider the tip of the PropTech M&A iceberg.
• 63% of startups are forecasting at least 2X revenues or more for 2017, compared to their 2016 numbers, demonstrating strong sales growth optimism. 

SUMMARY FINDINGS

• Investors are significantly more confident about the real estate tech market than entrepreneurs
• Investors and startups both expect the market to get more competitive—except for finance & investment and consumer / broker tech
• Investors are leaning in, but entrepreneurs (particularly on the West Coast) are very skeptical of funding availability and exit opportunities