CRETI Survey Reveals Proptech Investment Trends: Mid-Sized Checks Dominate Investor Interest
In a recent survey conducted by CRETI among 200 investors in its venture network, participants shared insights into their average check sizes per deal in the proptech sector. The survey, aimed at understanding the capital flow into proptech startups, highlights a predominant interest in mid-sized check sizes, with a strong leaning towards investments in the $1 million to $5 million range. Here’s a breakdown of the findings and what it suggests for proptech fundraising.
Key Findings and Analysis
1. Mid-Sized Investments Dominate
The data shows that 51% of investors are comfortable writing checks in the $1 million to $5 million range.
Specifically:
$1,000,000 - $2,999,999: 67 investors (33.5% of respondents).
$3,000,000 - $4,999,999: 35 investors (17.5% of respondents).
This suggests that investors are predominantly focused on early-to-mid-stage funding rounds, making these check sizes ideal for startups aiming to solidify their market position and accelerate growth without yet requiring massive capital injections.
2. Limited Appetite for Larger Check Sizes
Only 4% of investors indicated an average check size of $10 million or more.
$8 million - $9,999,999 checks also attracted 4 investors, or 2% of the sample.
While there is some availability of capital for larger rounds, the limited number suggests that proptech startups seeking substantial funding may need to look to specific growth or late-stage investors within the network. Large checks remain uncommon, emphasizing the need for startups to scale methodically.
3. Notable Interest in Smaller Check Sizes
A considerable number of investors are focusing on smaller, seed-stage investments:
$100,000 - $499,999: 31 investors (15.5%).
$25,000 - $99,999: 31 investors (15.5%).
With 31% of investors willing to invest in sub-$500,000 rounds, there is clear support for seed-stage and pre-seed proptech ventures. This could be especially beneficial for nascent startups that require initial funding to validate their business model or develop an MVP.
4. Modest Interest in Small-Mid Range Investments
Check sizes in the $500,000 to $999,999 range attracted 16 investors (8% of respondents).
This range, which might be expected to bridge seed and early-stage rounds, has comparatively lower interest than the $1 million+ checks. This could reflect a trend where investors either prefer to commit fully to seed rounds under $500,000 or invest more substantial amounts above $1 million.
What This Means for Proptech Fundraising
The survey results offer valuable insights for proptech startups at various stages of growth. Here are some takeaways:
Early-Stage Startups Have Options: For seed-stage companies, the availability of smaller check sizes under $500,000 is promising. Many investors in the CRETI network are willing to support early-stage ideas, providing critical capital for companies in the validation phase.
Mid-Stage Funding is Strong: Startups seeking to raise in the $1 million to $5 million range are well-positioned, as over half of the surveyed investors are interested in this check size. This indicates a strong appetite for startups that have gained some traction and need additional funds for scaling.
Fewer Options for Late-Stage Capital: While larger checks (over $8 million) are available, they make up a small portion of the funding landscape. Late-stage proptech companies might face challenges securing capital from the network alone and may need to look outside or consider alternative funding sources like strategic partnerships.
Final Thoughts
The CRETI survey demonstrates a healthy distribution of investment preferences across the proptech sector, with a strong emphasis on mid-sized funding. This balanced approach indicates a market receptive to startups at various stages but especially favorable to those seeking early to mid-stage capital. As proptech continues to evolve, understanding these funding dynamics will be key for startups to align their fundraising efforts with investor expectations.
