The real estate industry has long been slow to innovate, but things could be changing. (Credit: iStock)
The real estate industry has long been slow to embrace innovation. But judging by recent investment figures, that might not be the case for much longer.
Venture investment in real estate tech startups hit $12.9 billion in the first half of 2019, the Wall Street Journal reported, citing data from research firm CREtech. That’s already more than all of 2017, which saw a record $12.7 billion in proptech investment.
“We feel like we’ve hit that tipping point a couple of months ago,” Allison Sedrish, co-head of the new proptech group at Barclays Investment Bank, told the Journal. Barclays is one of the many major institutions that have recently taken an interest in the sector.
Toronto-based Brookfield Asset Management also began investing in real estate tech last year under a new venture capital unit called Brookfield Ventures, alongside divisions dedicated to infrastructure, private equity and power.
Meanwhile, as Softbank has invested heavily in real estate firms like WeWork and Compass for years, other investors have also been encouraged to follow suit.
“If you see someone like SoftBank piling in the extra hundreds of millions of dollars, it makes you more inclined to say ‘the money could come, so let’s make that early bet,’” said Mark Goldberg, a partner at Index Ventures.
As property values have begun to plateau, and with office and retail sectors facing disruption from technology, many investors now expect more real estate firms to turn to proptech to drive revenue and cut costs. [WSJ] — Kevin Sun
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