PropTech, also known as ReTech (Real Estate Technology), is an innovative approach to real estate in which technology optimizes the way people research, rent, buy, sell, and manage properties.
This cross-industry technology benefits all parties involved — from developers and investors, to property owners and property management companies. Moreover, Deloitte notes that PropTech has also substantially benefited the real estate industry by enhancing home sharing and office sharing.
Real estate technology companies started to penetrate the market in 2012 and saw explosive growth from 2015 to 2019. The housing market was deeply impacted by the pandemic, especially with surging demand from millennials moving from urban to suburban areas. Despite a pullback in 2020, quarterly funding trends in 2021 YTD show excellent growth potential in ReTech.
During the last several weeks there has been a lot of talk about the housing market, especially in the United States, which led the pace in the ReTech space development.
All across the United States there has been an incredible amount of ReTech innovation, with more than 2K companies across the country. According to a research conducted by Unissu, while most ReTech companies in the U.S. serve the residential sector (60.04%), a large percentage focus on B2B (69.37%).
Pitchbook data shows that in 2021 YTD ReTech companies globally have received total equity funding of $28.07B through 351 deals in the United States, which has outstripped 2020 numbers in both funding ($13.11B) and number of deals (341). In 2019, the ReTech space had a total equity funding of $13.60B through 461 deals. It is plain to see how much the pandemic impacted the ReTech space in 2020 and how it is now recovering.
Although the PropTech industry is thriving, the U.S. is still struggling with the same global economics issues as the rest of the world — there remains a severe housing shortage in many of the major cities. This has led to a surge in Real Estate prices, a lack of inventory, and a backlog in new home construction.
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