In the so-called proptech market—considered one of the most vibrant segments of the startup world—investment appetite has increased tenfold in just five years. Last year, $2.6 billion of fresh capital flowed into companies supporting the digitalization of the real estate sector. Preliminary data shows that in the first half of 2020, deals worth $7 billion were closed, thanks to the digitalization boom triggered by the COVID crisis.
Each year, KPMG compiles and publishes a list of companies that have introduced innovative solutions in construction, real estate transactions, or property management. These so-called proptech (property technology) companies attract tremendous amounts of capital, as digitalization in any segment of the sector can result in enormous savings and efficiency gains.
Sustainability and efficiency: valued by buyers
Innovative solutions also typically contribute to environmentally sustainable development—not only by reducing costs but also by lowering emissions from construction projects and property management. Buyers and tenants increasingly value this. According to the survey, low-emission properties sell in half the time compared to less sophisticated buildings, which is crucial in the highly capital-intensive real estate development sector.
For a long time, real estate development and management lagged behind commerce or finance in terms of digitalization. But now, it is catching up in giant leaps, driving growing global interest in innovative solutions. Since 2014, investment in proptech companies has increased by 766%, reaching $2.6 billion in 2019 alone.
COVID-19 accelerated the digitalization boom
Then came the coronavirus pandemic, which further boosted interest in proptech companies. Their solutions often replace human interactions in construction, workplaces, or real estate trading and management.
They also consistently deliver significant efficiency improvements and generally enable the sector to respond quickly and cut costs—both highly valued during the pandemic. Unsurprisingly, according to Unissu, investment appetite accelerated even further this year, with $7 billion invested in the sector in the first half of the year alone.
Hungarian companies on KPMG’s global proptech list
On this market, KPMG’s platform connecting proptech companies and investors plays an important role. This year, seven Hungarian startups made it onto the list (compared to five last year). Árminimum, Lokchek, OrtoGraph, and Rollet brought innovations in process digitalization; OOTT Technologies and Parkl developed new solutions in the IoT category—web-based control of everyday devices; and Beyond Visual delivers solutions in Virtual Reality and 3D design.
The full study, with many more details, is available here in English.