Investment in UK proptech quadruples in 2021

Driven by demand for sustainability, wellbeing, robotics and other concerns, proptech startups in the UK raised £1.6bn this year – up 360% on 2020.

Data compiled by Pi Labs shows that the sector is becoming mainstream, attracting investment from institutional real estate and tech investors. For example, Plentific’s recent $100m fundraise was led by Brookfield, with participation from Mubadala Investment Company.

Globally, $20.6bn was invested in proptech this year, more than double the $9.4bn raised in 2020.

But the numbers also show that investment has particularly surged in the UK: since 2016, investment in real estate tech startups has tripled globally, while growing 15-fold in the UK.

Faisal Butt, CEO of Pi Labs, said that investment has grown significantly due to “operational performance gaps” that have been unaddressed for years.

Singling out growing urgency within real estate – and the wider world – to address climate change, Butt said: “As the UK real estate sector wakes up to the changes required to reach net zero targets, landlords, investors and occupiers are realising that technological adoption will play a crucial role in future-proofing assets and meeting sustainability pledges.

“On the back of the large wave of capital raised this year, and accelerated adoption within the sector, many proptech companies are now achieving scale and we can expect later stage funding rounds and M&As to drive investment growth in 2022.”

A year of huge deals

Alongside fundraising data, Pi Labs also crunched the numbers on proptech M&A activity, identifying 152 acquisitions globally in 2021, the most since records began and up from 92 in 2020.

Recent consolidation in the sector has led to several substantial, and even record-breaking deals in the sector. These include:

• VTS acquiring tenant experience platform Lane Technologies for $200m
• HqO and Office App merging to create a tenant experience business valued at more than $500m
• Hilti’s $300m deal with construction tech company Fieldwire
• VTS acquiring Rise Buildings for $100m

At the same time, SPACs became a popular route to take companies in the sector public. In 2021, these included Matterport, Latch, SmartRent, WeWork and, most recently, access control business Brivo.