The proptech sector has been experiencing tremendous growth in Europe. New companies are coming forward from all corners of the continent, and introducing new technologies that aim to transform the traditional real estate processes. Their collective goal is to incorporate innovation and a customer-focused approach into one of the oldest industries in the world. So far, they have been showing significant progress.
From online marketplaces that enable faster renting, buying and selling and to platforms that allow for seamless real estate investing, the paper-heavy procedures of the past are increasingly becoming more manageable and effortless. In both residential and hospitality sectors, ‘tenant experience’ is becoming a key element of all decision-making processes, and pushing owner/operators, real estate service providers, and even investors to adopt the perspective of the end-user. Globally, proptech is shifting the balance of power within the industry, and putting the majority of power back in the customers’ hands.
Within Europe, the proptech sector has been experiencing its largest spur of growth in the UK, the long-standing financial center of the continent. Since 2016, the proptech industry has been steadily expanding as new innovations enter the market and attract new investments and investors from both venture capital and private equity funds.
In 2016, a total of £112.1 million has been invested in UK-based proptech companies across 66 deals. In 2017, both the dollar volume and deal volume increased; proptech companies received £626.1 million funding across 103 deals. On the private equity side, The Office Group (TOG) raised a £500 million round from Blackstone in 2017. The venture capital funding showed a significant increase once again in 2018, during which a total of £995 million were invested in proptech companies in the UK. However, the dollar volume decreased in 2019, and fell to £375 million.
Despite the slowdown between 2018 and 2019, continuing investor interest led to a number of large funding rounds in Europe in 2019. TopHat, a UK-based company developer of technology-driven modular housing manufacturing, raised £75 million in capital investment by Goldman Sachs. The company completed its first residential project in the second quarter of 2019 in the historic Kitchener Barracks in Chatham, Kent, and continues to expand and scale its business.
In September 2019, Casavo, an Italy-based provider of an online platform that enables instant buying and selling of real estate properties, raised £42.5 million in a series B funding. Casavo’s platform directly buys a property from sellers in less than a month and ensures that homeowners sell their property with a fair valuation. A month later, Blueground, a Greece-based developer of a property rental platform that provides turnkey flexible rental apartments, raised £38.6 million in a series B funding round. Blueground offers fully furnished apartments for lease and leverages technology and city knowledge to make the guests’ accommodation as seamless as possible. In addition to modular construction, flexible renting and online marketplaces, another category that is receiving investor attention is the co-working market. In March, Talent Garden, an Italy-based physical coworking platform that aims to connect talent around the world, raised £38.45 million. Talent Garden’s platform offers businesses, tech entrepreneurs and freelancers a space to connect, collaborate and learn from each other.
As CREtech researchers, we expect investor interest in funding Europe-based proptech companies to continue as new technologies join the market and provide feasible proof of concept.
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