2021 Proptech Venture Funding Breaks Real Estate Tech Industry Record
New York, NY — The Center for Real Estate Technology & Innovation (creti.org), the real estate technology industry’s think tank and venture network released the 2021 Real Estate Tech Venture Funding Report on venture capital investments in private real estate technology companies.
Venture capital investments in real estate tech returned to pre-pandemic levels. In 2021, $32 billion was invested in real estate tech companies, a 28% increase in funding since 2020 and 3.23% increase compared to 2019.
“In 2021, proptech decisively became one of the largest, highest performing, and most compelling categories of all venture capital markets. It’s thrilling and exciting to see proptech emerge as such an important category of venture capital,” said Brendan Wallace, Co-Founder and Managing Partner, Fifth Wall.
“Following a year of uncertainty the venture capital and real estate tech entrepreneur market is back in a meaningful way,” said Ashkán Zandieh, Chair at the Center for Real Estate Technology & Innovation. "The continued growth of the sector has seen new investors across multiple stages enter the market, including private equity groups and institutional organizations."
The report indexed and analyzed 1,483 venture investments across the greater real estate industry, including commercial, construction, residential, multifamily, and other asset classes and real estate services, including brokerage and management.
"Proptech is now a household name in both the public and private equity markets," said Zach Aarons, Co-Founder, and General Partner at Metaprop. "The cat's out of the bag. The industry is truly global and adoption is accelerating very quickly. We have definitely experienced some choppiness in the public equity markets as the sector reaches a maturation point and analysts realize that not all businesses within the proptech sector should be valued the same way."
“As of late November, more than $9.5 billion had been invested into proptech. This record-breaking flow of capital into the category demonstrates that the real estate industry is embracing and deploying technology, and proptech is no longer a niche investment area. Similarly, the real estate industry needs to invest $18 - $36 trillion into climate tech over the next 20 years, calling for more innovation and entrepreneurship-focused on decarbonization. In 2022, we anticipate an increase in capital flow into climate tech for real estate,” said Brad Griewe, Co-Founder and Managing Partner, Fifth Wall.
Throughout the year the market continued to gain momentum in funding and showed signs of evolution as venture capital investments shifted from early-stage to mid and late-stage companies. 57% of total venture funding went to companies that raised a Series C and greater.
"2021 was a historic year for the real estate tech sector not just with regards to funding but also in terms of the pace of adoption,” said Michael Beckerman, CEO at CREtech. “While venture funding has always been the most important metric of progress for this young industry, it is now also important to note that the startups themselves are scaling to historic levels of adoption and revenue.”
The increased flow of capital is only one of the signals of the rising real estate tech wave. In a review of investments by sector, 49% of global funding went to residential tech companies, while commercial received 7.6% of total funding.
"2021 was the year of validation and consolidation. Multiple categories saw SPACs and strategic acquisitions took place," says Vince Cicciarelli, VP and Partner at Lincoln Property Ventures. "The cordial introductions are over and now everyone is off to the races in major categories that have emerged."
About CRETI
The Center for Real Estate Technology & Innovation is a non-bias think tank in real estate technology. We provide non-bias and metric-based insights on real estate technology and venture capital for technology investors, entrepreneurs, professionals in the greater real estate industry.
