Real Estate Technology Sector Overview – Q4 2017
The real estate technology (proptech) sector has seen a lot of funding and exit activity over the past few years. Yet what are the different components of proptech and how do they make up this startup ecosystem? On our real estate technology research platform, we have classified the companies in the sector into functional categories. This blog post aims to examine these categories and how they compare with one another through a series of graphics.
IoT Home Is the Largest Real Estate Technology Category
Let’s start off by looking at the Logo Map for the real estate technology sector. As of January 2018, we have classified 1,613 real estate technology startups into 12 categories which collectively raised $46 billion in funding. The Logo Map highlights the number of companies in each category and a random sampling of these companies.
Real Estate Technology Logo Map
We can see from the Logo Map above that IoT Home is the largest real estate technology category with 329 companies. This category is comprised of companies that provide Internet of Things (IoT) devices focused on the residential real estate segment. Some example companies in this category include Ayla Networks, Nest Labs, Dojo Labs, and Entia.
We have seen what the different categories in real estate technology are and how many companies are within each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
Most of the Real Estate Technology Categories Are Pioneers
Our Innovation Quadrant for the real estate technology sector divides the categories within the sector into four different quadrants according to their average funding and average age. The Heavyweights are the categories with companies that have reached maturity with significant financing. The Established are those that have reached maturity with less financing. The Disruptors are less mature but with significant financing. The Pioneers are less mature and with earlier stages of financing.
Real Estate Technology Innovation Quadrant
We can see from our Innovation Quadrant above that most of the categories within real estate technology belong in the Pioneers quadrant. The Commercial Search category has raised more funding and thus made its way into the Disruptor quadrant. Construction Management and Facility Management are the most mature categories with less funding. Life, Home, P&C Insurance category is in the Heavyweights quadrant for having reached maturity with significant financing.
We’ve now seen how the real estate technology sector is categorized and the relative stages of innovation for those categories. How do these categories stack up against one another in a holistic view? Let’s look at the Total Funding and Company Count Graph.
Commercial Search Is the Best Funded Real Estate Technology Category
The graph below shows the total amount of venture funding and company count in each real estate technology category.
Real Estate Technology Total Funding and Company Count by Category
We can see from the graph above that while IoT Home has the most companies in the real estate technology sector with 329 companies, it’s the Commercial Search category that leads the sector in total funding with $8.5 billion. The Commercial Search category is comprised of companies that help consumers and businesses find commercial real estate for rent and sale. Some example companies in this category include WeWork, 42Floors, CoworkingON, and PivotDesk.
Conclusion: Most Real Estate Technology Categories Have Large Growth Potential
The graphics above indicate that most of the real estate technology categories are pioneers and show large potential for growth and development. In addition, the sector is bustling with a good number of IoT Home companies. Yet the real estate search companies, including Commercial Search, Short-Term Search, and Long-Term Search, are receiving the lion’s share of the venture funding in the market. It will be interesting to see if this trend continues in 2018.
What are your thoughts on this? Let us know in the comments section below.
To learn more about our complete Real Estate Technology report and research platform, visit us at www.venturescanner.com or contact us at [email protected].