Funding for Europe’s proptech sector has soared 550% in five years, new report shows

Funding for Europe’s proptech sector has soared 550% in five years, new report shows
Finance

Proptech companies are surging in Europe, with a 550 percent growth in funding over the last five years, according to a new report, suggesting steady expansion for a relatively new sector in Europe. 

The research was conducted by Proptech1 Ventures, a German proptech investment fund. It shows that just €77 million was invested in the proptech sector in 2014, while they now total €500 million. 

Although the UK drew the largest volume of financing, it’s close to France and the DACH region, which includes Austria, Germany, and Switzerland, when it comes to the total number of proptech startups. Germany is also one of the key backers of European startups in the sector, home to top investors such as Vito ONE, BitStone Capital, SIGNA Innovations, and PropTech1, who published the report. 

Spain and the Nordic countries are also home to a significant number of proptech startups. 

Most recently, proptech companies like TopHat, Nested, McMackler, Spotahome, Badi, and Finalcad have all raised large funding rounds. 

The report says the sector is entering a new, higher-stakes phase of development:

“The coming-of-age phase, in which PropTechs were playfully tried out, is over; the sector will increasingly have to convince with measurable efficiency gains in the real estate core business starting in 2020.”

“The still relatively young PropTech sector has predominantly not yet reached the late stage, which is why the largest financings are still to come,” the company said in the report. 

And last month saw the launch of the new venture capital firm A/O PropTech, with €250 million for startups disrupting the established real estate sector. They’re calling their fund “permanent capital,” and the firm is taking the structure of a typical corporation with shareholders, instead of a venture capital fund expected to last for two to five years. They’ll invest in Series A as well as later funding stages for proptech firms.

They see Europe as fertile ground for proptech investments.          

“We focus primarily on companies which are targeting markets where we can be impactful, so you will find that most of our investments are in Europe, but can extend to US or Israeli companies that are scaling in our core European markets,” founder and CEO Gregory Dewerpe told TechCrunch. 

In February, a report from the University of Oxford showed a grand total of $5 billion has been invested in the UK’s proptech startups, and proptech investment has grown twice as fast as the fintech over the past two years. 

Photo by kloniwotski / CC BY-SA (https://creativecommons.org/licenses/by-sa/2.0)

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