Proptech is all about the use of information technology that allows individuals and companies to research, buy, sell, and manage real estate.
This has transformed the business of real estate digitally due to its unique and innovative usage in various sectors like commercial, residential, and industrial. Internet usage is skyrocketing, and real estate tech companies are reshaping the future of sales online with underwriting and analytics as a part of Proptech.
GCA is a global investment bank. It offers capital markets advisory services and strategic M&A to market leaders and growth companies. In the Proptech 2020 year-end review, there was a bit of a decline in the US Proptech market from the record capital-raising levels of the year 2019.
The market was still very dynamic, with an investment of around $7.3 billion equity and debts generated from around 300 deals in the Proptech category. There were 58 deals of $20+ million in equity invested and 28 deals of $50+ million in equity investment. This has brought the phenomenon of scaling leaders emerging among all sub-categories of Proptech and established category leaders with investors backing. Also, there was $100 million+ investment in companies like Better, Hippo, Sonder, Vacasa, Procure, Katerra, and more.
Mergers and Acquisitions (M&A) market was performing dynamically with 100 US Proptech deals in which the majority was driven by the strategic buyers and the private equity rising. In the market, the valuation multiples stayed very good, especially for software businesses. The rise of Special Purpose Acquisition Companies (SPAC) happened with Proptech in focus. It’s because of the National Association of Securities Dealers Automated Quotations (NASDAQ) going up by 44% in 2020.
Companies like Porch, Open Lending, United Wholesale Mortgage, Opendoor, and Vivint, etc., announced their SPAC mergers with multiple SPACs looking for targets as part of Proptech. Also, the success of initial public offering (IPO) from many Proptech companies and more IPO awaiting release does showcase their demand in the market from the public. GCA expects further improvements in the Proptech market activity in 2021 as per the current momentum and trends.