Investments in proptech firms dip only 3% in 2022 despite global headwinds: Report

In spite of global economic uncertainties and a funding winter in the startup sector at large, funding in proptech firms stood at $719 million in 2022 compared to $742 million in 2021.

Despite global economic uncertainties and a funding winter seen in the startup sector at large, funding in proptech firms dipped by a mere 3 percent in 2022, touching $719 million, according to a report by Housing.com

Funding in proptech firms declined marginally from $742 million in 2021, it said.

Overall, the proptech sector demonstrated resilience with a cumulative investment of nearly $4 billion between 2009 and 2022, boasting a remarkable compound annual growth rate of 49 percent.

"Investments in the proptech space remained stable throughout 2022, even amidst global turmoil. Over the past decade, the real estate sector has made significant strides in adopting innovative technologies, particularly in the last three years. The COVID-19 pandemic and subsequent lockdowns served as catalysts, accelerating the adoption of technology across the industry,” said Dhruv Agarwala, group CEO of Housing.com, PropTiger.com and Makaan.com.

While funding in proptech firms declined slightly from $742 million in the previous year, certain segments within the industry drew substantial investor interest. Shared economy platforms such as co-living and co-working secured the majority share, accounting for 64 percent of the total fund inflow.

Proptech players offering construction technology solutions received 15 percent of the total funding in 2022. This trend reflects real estate developers' growing emphasis on reducing construction timelines while maintaining high quality standards.

“The co-working segment has witnessed rapid expansion in the last three years, driven by the escalating demand for flexible workspace solutions from corporates," Agarwala said.

Despite facing challenges during the COVID-19 pandemic due to the temporary closure of schools and colleges, the co-living segment made a remarkable recovery with the reopening of educational institutes and offices. Co-living operators that weathered the pandemic storm experienced a V-shaped recovery, with substantial demand for superior quality rental accommodations.

“The last half-decade or so has seen tremendous growth in investments, indicating that India's proptech sector is a bright spot in the global market. Today tech is being used across all stages of the real estate lifecycle, from finding a property to closing the deal. This is also cutting time and pricing, making processes for all stakeholders more efficient and streamlined,” said Ankita Sood, head of research, Housing.com, PropTiger.com and Makaan.com.