Weekly Proptech: Friday, October 21, 2022

Written By CRETI
 
 
 

This Week in Proptech

This Week in Proptech — $213 million was invested across 17 companies at a median funding amount of $5 million. Some of the largest funding rounds went to residential, insurance, commercial real estate, construction, and other proptech companies.

Funding in a Nut Shell: Despite turbulence in the public equities market, proptech is riding a three-week bull run. During the past three weeks, venture capital investments in the industry has increased by 45.2 percent.

CRETI PROPTECH VENTURE INDEX

State of the Market

If you haven't heard, this week, Amazon launched an insurance marketplace in the UK with long-term expansion plans. On the heels of the announcement, this week we took a look at the state of venture capital investments in the insurtech industry.

The insurance technology industry has been in a recent growth phase, similar to proptech back in 2015. But that's where the similarities end. Unlike the real estate industry, insurance has been amongst the greatest laggards in innovation and technological adoption. It's no wonder that companies like Amazon see an opportunity to innovate and capture market share, especially in the residential real estate industry.

In fact, according to a Mckinsey report, Creating value, finding focus: Global Insurance Report 2022, three structural factors are challenging industry growth: interest rates, pricing pressures, and lower-cost options. The latter is particularly worrying, according to the report, because growth in developed economies is coming mostly from price increases rather than from volume or new risks covered, highlighting a risk that the industry might lose its relevance over time.

What Does This Mean For PropTech?

Venture capital investments in insurtech companies are a force to be reckoned with. Venture capital investments in 2021 surpassed $11 billion, double the amount invested in 2020. In addition, investors, namely private equity and venture capitalists, are increasingly looking to invest sooner in earlier rounds, increasing the amount of capital in the sector.

In 2021, 9.2 percent of all venture capital investments in the insurtech industry went to real estate tech companies in the sector. 2022 is much of the same. Year to date, nearly $900 million has been invested in proptech-insurance companies, creating new opportunities for the next shift in an innovation-thirsty sector.

Notable Rounds of Funding

  • October 19, 2022 — Holidu, a vacation rental marketplace, raised a $104 million Series E and Venture Debt round led by 83North with investments from HV Capital, Northzone, EQT Ventures, 7 other investors.

  • October 19, 2022 — Landis, a residential real estate rent-to-own platform, raised a $40 million Series B led by GV with investments from Sequoia Capital, Second Century Ventures, and 4 other investors.

  • October 18, 2022 — Volpi, an alternative residential fintech platform, raised a $30 million venture round from RBR Asset Management.

 
CRETI https://cretiventures.com
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