Private equity (PE) investment in proptech firms rose 5 per cent to USD 270 million during the January-June period as the adoption of technology gains momentum in the real estate sector, according to Housing.com. Between 2009 and June 2022, the proptech companies in India received a total of USD 3.42 billion in PE funding.
The PE inflow in proptech rose 35 per cent in 2021 to USD 741 million from USD 551 million in the previous year. Housing.com, which is part of REA India that also owns PropTiger.com and Makaan.com, the number of PE deals during January-June 2022 has grown by 1.5 times year-on-year.
The average deal size in H1 2022 stood at USD 14 million compared to USD 32 million during the same period in 2021. The investments tracked include private equity, venture capital, debt, PIPE (Private investment in public entities), project level investments, and pre-IPO private equity deals, at the early, growth and late stage.
Dhruv Agarwala, Group CEO of Housing.com, PropTiger.com and Makaan.com, said: "While PropTech firms have been around in India for more than a decade and a half, of late, this space has attracted a lot of interest from investors, both domestic and overseas". The use of technology has been steadily permeating across the real estate value chain over the last decade but it has accelerated significantly since the outbreak of the COVID-19 pandemic, he added.
"This has led to a significant reduction in the time taken for the closure of property transactions. Managing construction activities, as well as management of housing societies and commercial complexes, have become more efficient," Agarwala said. As per the data, PropTech firms that are involved in construction technology, sales and marketing, coworking and coliving garnered 77 per cent of the total PE investment during January-June 2022.
Ankita Sood, Head of Research, Housing.com, said India is the second largest internet user in the world and this coupled with the pandemic-induced digital acceleration in itself presents a colossal opportunity for PropTech space in the country. The firms in the PropTech space in India are constantly using innovative technologies, such as artificial intelligence (AI), internet of things (IoT) and virtual reality to augment the customer and consumer experience across the real estate life cycle, she said.
"Along with these, upcoming technologies such as metaverse and blockchain, which are slowly gaining ground in India, are poised to open up a myriad of opportunities in the real estate sector," Sood said. All stakeholders -- including real estate developers, property brokers, and prospective customers -- are increasingly using digital tools and technologies not only for search and discovery but also for advisory and transactional support.
Sales and marketing have become more effective and targeted with the use of technologies like Artificial Intelligence, machine learning, virtual and augmented reality and drones.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
