Global analysis of venture capital investments in real estate tech (proptech)
Globally, real estate tech (proptech) investment soared as the market undertook a reset following a year of "cautious capitalism” across North America, Europe, and Asia. Despite the ongoing decline in the number of venture capital deals, coupled with a balanced and steady 2015 and 2016, a significant number of mega-deals in real estate tech drove the funding boom across the sector in 2017.
Overview: Real Estate Tech Venture Capital Ecosystem
Global venture capital investments in real estate tech companies catapulted in 2017, a trajectory set by a moderate 2016. Between concerns over ballooning valuations and limitations of a horizontal industry a year prior, nearly $12.6 billion was invested across 347 deals, a 92 percent increase in global investments, the largest fiscal year in real estate tech history.
Venture Capital Dollar Volume Continues to Skyrocket:
Bolstered by venture activity in the US, real estate tech dollar volume increased by an average of 115 percent since 2015. Over the past year, nearly $6.5 billion, 52 percent, were invested in U.S. based real estate tech companies. In addition to the $12.6 billion invested in 2017, Early Stage companies received the lions share of deals with over $480 million invested of across 218 deals, followed by Late Stage Financing with over $404 million invested across 42 deals. In terms of financing, Growth Equity companies supported 2017 with over $11.7 billion invested across 87 deals.
Quarterly Analysis: Venture Capital Investments Surge Amidst Volatile 2017
Investments in real estate tech got off to a volatile start in 2017. While real estate tech dollar volume showed signs of erratic unrest during the first half of 2017, Q3 catapulted total investments to the highest level in history, with nearly $3 billion invested in a single quarter. Since Q2 2017, total investments appreciation by nearly 224.7 percent in Q3 2017, the largest capital and percentage growth to date.
Deal Volume Continues to Decline:
The growing disconnect between deal and dollar volume continued their oppositional trend in 2017. Since 2016, deal volume has decreased by nearly 7.1 percent to 347 deals. However, on a three year spread, the number of funding grew by 5.1 percent size 2015.