Indian Proptech Firms Witness Slight Dip In Funding

Proptech players had received a funding of $742 million in 2021 while in 2022, the figures came down to $719 million

Funding in Indian proptech firms fell marginally by 3 per cent to $719 million during the last calendar year, as investors continue to have a positive outlook on the growth of start-ups providing technology solution in real estate space, according to a report by the Indian company Housing.com. Proptech players had received $742 million in the 2021 calendar year. “Despite global economic uncertainties, funding in proptech firms experienced a slight dip in 2022, reaching $719 million,” the report said.

The cumulative investment between 2009 and 2022 has reached nearly $4 billion in proptech firms, with a compounded annual growth rate (CAGR) of 49 per cent. “Over the past decade, the real estate sector has made significant strides in adopting innovative technologies, particularly in the last three years. The COVID-19 pandemic and subsequent lockdowns served as catalysts, accelerating the adoption of technology across the industry,” said Dhruv Agarwala, Group CEO of Housing.com, PropTiger.com & Makaan.com.

As per the data, shared economy platforms such as co-living and co-working secured the majority share during the last calendar year, accounting for 64 per cent of the total fund inflow. This surge of investor confidence can be attributed to the perceived growth potential in these segments.

Proptech players offering construction technology solutions received 15 per cent of the total funding in 2022. This trend reflects the real estate developers' growing emphasis on reducing construction times while maintaining high-quality standards. In countries like India, where extended construction cycles inflate project costs, proptech solutions are increasingly being leveraged for effective project management.

Agarwala noted that the co-working segment has witnessed rapid expansion in the last three years, driven by the escalating demand for flexible workspace solutions. Despite facing challenges during the COVID-19 pandemic due to the temporary closure of schools and colleges, the co-living segment made a remarkable recovery with the reopening of educational institutes and offices.

Co-living operators that weathered the pandemic storm experienced a V-shaped recovery, with substantial demand for superior quality rental accommodations, Housing.com said. The report encompassed various investment deals, including Debt, PIPE (Private Investment in Public Entity), PE investments in Special Purpose Vehicles (SPV), Project-level investments, Pre-IPO PV deals, and buyouts. However, deals with undisclosed amounts were excluded from the analysis to maintain transparency.

Expressing his views on the report, Abhishek Tripathi, co-founder of co-living firm Settl, said, “Proptech in India is currently in its early stages but holds significant promise for growth. Its emergence has already brought about notable transformations in the real estate industry.” As per the Housing.com data, funding in proptech stood at $551 million in 2020, $549 million in 2019, $527 million in 2018, $206 million in 2017, $168 million in 2016, $127 million in 2015, $203 million in 2014, $51 million in 2013, $15 million in 2012, $9 million in 2011, $6.1 million in 2010 and $0.2 million in 2009.