In this GovTech in Focus, Chiara Carlini examines proptech, its growth and companies with the potential to transform the public sector property market.
Ten years ago the real estate market had been widely untouched by innovation or technology. Now it is going through a process of deep transformation thanks to the advent of proptech, one of the fastest growing tech subsectors.
What is proptech? From planning, to building, to facility management, to consumer experience and investments, the proptech sector encompasses digital solutions for the benefit of all the players in the property market.
Since the launch of Zoopla, the first proptech giant that have made buying a property possible in just a series of clicks, the use of technology has spread to other segments of the real estate cycle. Drones, for example, are increasingly being used in construction sites; big data helps property managers to predict the impact of future construction; and virtual reality allows buyers to experience immersive tours of properties that are yet to be built.
Small and agile startups are at the forefront of proptech’s disruption – and funding from the public sector is increasingly being made available to innovative technology companies that can solve key housing and construction challenges. In autumn 2017, the UK government launched the Rent Recognition Challenge, a £2 million Prize Fund for solutions that can enable rental tenants to record and share their rental payment data with lenders and credit reference agencies. Alongside this, HM Registry and Ordnance Survey have backed London-based accelerator Geovation, an initiative providing focused support and grant funding to startups using location and property data.
Private investments in real estate tech is also growing. In 2008, just £15m was invested into proptech startups; by 2018 the figure has reached $3B – a 38% increase from the previous year’s funding. Dedicated proptech funds include the US-based FiftWall and MetaProp, and Europe’s first property tech venture capital Pi Labs.
Over 6800 startups are working in Proptech. Below is a brief segmentation of the market particularly relevant to the public sector, highlighting a few innovative players: