The State of Pre-Seed and Seed Investing in Proptech
How early-stage funding is evolving in real estate, construction, and adjacent tech
Despite a volatile venture capital market, pre-seed and seed investing in proptech has remained a critical entry point for innovation in real estate, construction, and adjacent technology sectors. While total funding has fluctuated over the past five years, average round sizes have consistently grown, signaling a shift in investor strategy.
In this analysis, we explore:
1. Fewer Deals, Larger Check Sizes
The total amount of pre-seed and seed funding in proptech peaked in 2022 at $1.2 billion before declining to $1.0 billion in 2024. However, during this period, the average seed round size has increased from $1.1 million in 2020 to $2.2 million in 2024—a 100% jump.
This trend indicates a consolidation of capital, with investors focusing on fewer, larger investments rather than spreading smaller checks across many startups. As a result, proptech startups today must demonstrate strong traction and more apparent paths to scale to secure funding.
2. The Market Reset Has Raised the Bar for Startups
The most notable shift in the past five years is the higher expectations for early-stage companies. In 2020 and 2021, capital flowed relatively more freely, fueling a surge in pre-seed and seed investments. However, as total funding fell from $1.2 billion in 2022 to $1.0 billion in 2024, investors became more selective.
Key takeaways:
In 2020, the average seed round was $1.1M, allowing more early-stage startups to secure funding.
By 2024, the average round size had grown to $2.2M, meaning fewer startups are getting funded, but those that do are receiving more capital.
Investors now prioritize business fundamentals over pure growth, requiring clear go-to-market strategies, capital efficiency, and early signs of revenue traction.
3. The Longer Road to Series A
As seed rounds grow larger, the journey to Series A is becoming longer and more competitive. The data suggests:
In 2021, when funding peaked at $624 million for seed-stage startups, the average round size was only $1.3M—allowing more startups to raise early funding.
By 2023, total funding remained high at $1.1 billion, but the average round size had climbed to $1.8M, meaning that startups had to prove more traction before securing capital.
The drop in total funding in 2024 suggests that many startups that raised early funding in 2021-2022 struggle to reach Series A, forcing them to raise follow-on seed rounds instead.
For founders, this means a longer runway and more potent traction are now required before advancing to the next growth stage.
Final Thoughts
The proptech early-stage market is maturing, with larger seed rounds, fewer deals, and higher investor expectations. The $1.0 billion raised in 2024, despite a slowdown from the 2022 peak, shows that capital is still available—but only for the most substantial companies.
For founders, securing seed funding today means:
Proving early traction before raising capital—simply having a strong vision is no longer enough.
Focusing on efficient growth and revenue—investors are backing companies with precise business models.
Preparing for a longer fundraising journey—the path from seed to Series A is now more competitive than ever.
While pre-seed and seed funding remains critical to proptech innovation, they are increasingly concentrated among fewer, well-positioned startups, reshaping the early-stage landscape for the years ahead.
