Dive Brief:

• Proptech companies remain constrained by a tightened funding environment, according to a survey of 1,088 startups from the Center for Real Estate Technology & Innovation
• Venture capital investments in proptech and adjacent companies fell 14.3% from $5.10 billion to $4.37 billion in the first half of the year, according to CRETI.
• By comparison, total venture capital funding was $13.13 billion in the first half of 2022. “This trend suggests a prioritization of quality over quantity in investments, reflecting broader economic uncertainties and a tightened financial environment,” according to CRETI.

Dive Insight:

Early-stage funding, which includes startups in the nascent phases of their business cycles, is a bright spot. More than half, 63.7%, of surveyed companies are seeking to raise money at that level, according to CRETI. 

Growth-stage funding from companies that have moved past the initial startup hurdles and are now focusing on scaling their operations and market reach made up 28% of surveyed companies.

A small number, 8.3% of the surveyed startups, were in the late stages of funding, which indicates a small portion of the market is seeking capital injections to solidify their market positions or prepare for exits, according to CRETI.

“The overwhelming majority of early-stage funding seekers underscores the sector's emphasis on new and emerging technologies,” according to CRETI. “These startups are poised to drive innovation and potentially disrupt traditional real estate and construction paradigms.”

Notable funding rounds

The CRETI report highlighted Bilt Rewards as one apartment-related company that had a major funding round in the first half of the year. The firm, whose relationship with Wells Fargo recently drew scrutiny, attracted $200 million in a venture round led by General Catalyst. The New York City-based startup offers solutions in the rewards and loyalty space.

Tel Aviv, Israel-based Guesty, which raised $130 million in a Series F round led by Kohlberg Kravis Roberts, helps property managers manage short-term rentals, according to its website. “This funding highlights the continued growth and potential of property management technologies,” according to CRETI.

The vast majority, 91%, of protech and adjacent companies anticipate raising capital in the coming years. Forty-five percent of those anticipate that happening in the next 10 to 12 months.

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