Proptech firms garner investment of $4.6 bn in the last 14 years: Report

India’s proptech sector has shown resilience from FY2011-24 with investments totalling $4.6 billion and growing at a compound annual growth rate (CAGR) of 40 per cent. This rapid growth highlights the transformative impact of technology on the real estate industry, driving efficiency and innovation, according to the Annual PE Investment Round-Up report by Housing.com.

Despite global economic uncertainties, funding in proptech firms saw only a slight decline in FY24, with investments totalling $657 million, down from $683 million in FY23. This figure represents 90 per cent of the record-high $730 million investment received by the proptech sector in FY22.

The shared economy and construction technology segments have emerged as leaders in the proptech space, capturing 55 per cent and 23 per cent of private investments in FY24, respectively. Their substantial interest and investment underscore their pivotal role in shaping the future of real estate.

“In the face of global uncertainties and a general downturn in fundraising across sectors during the last couple of years, the proptech sector has shown remarkable resilience. Since FY11, it has sustained an impressive CAGR of 40 per cent. In FY24, it achieved its highest-ever average deal size of $27 million, reflecting robust investor confidence in the digital real estate space.

Over the past decade, and particularly in the last three years, the real estate sector has significantly advanced in embracing innovative technologies. This positive momentum is expected to continue, driving further advancements and efficiencies in the real estate market,” said Dhruv Agarwala, Group CEO of Housing.com and PropTiger.com.

The report highlighted that proptech companies specialising in construction technology solutions received 23 per cent of total funding in FY24. This trend underscores real estate developers' increasing focus on reducing construction times while maintaining high-quality standards.

In countries like India, where prolonged construction cycles drive up project costs, proptech solutions are increasingly adopted for efficient project management. Additionally, the coworking segment has experienced rapid expansion over the past three years, driven by a growing demand for flexible workspace solutions from corporations.