Investors seeing strong returns on proptech investments

Metaprop’s Mid-year 2018 Global Confidence Index has ranked investor confidence in the industry at 8.7 out of 10. What’s more, 96% of respondents said they were planning to make the same number of proptech investments or more within the next 12 months.

This confidence could be explained by the fact that 36% of proptech investments are exceeding their expectations in terms of customer growth, up from only 12% in 2016.

Startups are growing more confident as well, with a 38% increase on last year in the number of startup CEOs that are feeling confident about securing fundraising. The size of proptech enterprises is growing, with 30% of startups employing more than 20 people.

What investments are being made?

According to the Index, worldwide investment in proptech startups has tripled from 2016 to 2017, rising from $4.2bn to $12.6bn.

The smart buildings sector is the most popular with investors, with 40% looking to invest in this branch of technology.

Early investment is also the preferred choice, with 75% of respondents looking to invest in seed or series A funding rounds.

What next for the proptech market?

The Mid-year Index suggests the industry will continue to see strong growth within the next 12 months, with increased investment matched by growth in the size and number of businesses. Of the startup CEOs interviewed, 70% believed their space would become more competitive, though only 17% think it will become more difficult to raise capital.

While investors believe the number of startups pitching may decline, the size of businesses is set to grow, with 47% of CEOs stating they intend to hire between 6-20 people.

The Metaprop Midyear Global Index was produced in partnership with the Royal Institution of Chartered Surveyors and the Real Estate Board of New York. Read the full report here.