JLL: No better time to invest in real estate technology
Rebounding after a pandemic-led slump, funding for property technology hit a record high $9.7bn in H1 2021.
Although the Covid-19 pandemic has accelerated many companies’ adoption of new technology, it initially slowed down funding for the sector in 2020, according to a new report by JLL.
Total venture capital funding to built environment technology fell 19.3% to $13.4bn in 2020, before accelerating to record highs this year.
JLL identified more than 7,800 companies that provide technology solutions “in various parts of the built environment”. These companies have raised $97bn of equity funding in the 10 years to H1 2021.
Raj Singh, managing partner of JLL Technologies’ global venture fund JLL Spark, said: “Our industry is right on the cusp of impactful change driven by widespread technology adoption.
“The trends we’re seeing suggest there may be no better time to invest in real estate technology. The opportunity to shape the industry for the future by supporting innovation holds great potential for strategic change as well as return on investment.”
Other key stats:
- London hosts more property tech startups than any other city at 458. New York and San Francisco round out the top three.
- The sector is still a young one, with three-quarters of property startups founded in the last 10 years.
- The US dominates the sector, accounting for half of funding companies over the last decade. China is the second largest market, having raised $16bn since 2010.
- Funding has migrated to more established companies as the sector matures. This has also led to greater consolidation with M&A activity reaching a record high of $21.9bn in 2020. Having reached $18bn so far in 2021, M&A activity is set to be even busier this year.
Singh said: “Recent events across the globe have highlighted the importance of addressing our industry’s impact, and leaders are taking this to heart.
“Proptech startups and more established tech and real estate firms are at the forefront of solving the industry’s challenges—with benefit to the world at large. Continued investment in these companies is an investment in the future of real estate.”