Proptech 2024, a year of growth with more early-stage, AI and blockchain investments – Proptech360

The year 2024 will be significant for proptech worldwide. If 2023 emerged as a cradle of innovation If 2023 emerged as a cradle of innovation backed by significant venture capital investment, 2024 will be the year in which it transcends its embryonic stage to become a dynamic innovation ecosystem that uses artificial intelligence to revolutionize in traditional real estate transactions and redefines the boundaries of what is possible in this industry.

The forecast comes from “Proptech Futures: 2024” by CRETI, the Center for Real Estate Technology & Innovation, a New York-based organization that conducts real estate technology research, insights, training and events through 2020. . The dual purpose of the report is to clarify proptech and facilitate decision-making by highlighting growth areas, investment models and emerging technologies.

Proptech 2024, return on investment

After a short hiatus, venture capitalists are returning to proptech. This recovery is supported by a combination of optimism and a strategic reorientation towards early-stage entrepreneurial ventures. Investors who were previously cautious due to market uncertainty are now actively looking for opportunities in nascent stage proptech businesses.

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This change is supported by a significant acceleration in the revenues of companies in venture capital portfolios, which refutes predictions of a market slowdown. This trend not only indicates strong demand for proptech solutions, but also indicates an accelerated pace of adoption within the real estate industry, which has traditionally been slow to embrace technological innovation.

Proptech, three trends for 2024

From 131 interviews, surveys and discussions with proptech venture capitalists conducted for CRETI’s ‘Proptech Futures:2024’ survey, three key trends that will shape proptech in 2024 emerged:

Shifting investments towards the seed stage

Notable is the focus on early-stage investments, especially in the “Feed and Seed” stages, which extend up to Series A rounds. This trend is driven by a combination of factors:

    • Calibrated and adjusted risk: Investors are showing a renewed willingness to invest in early-stage companies, indicating bullish sentiment towards the potential of the proptech sector.

    • Focus on innovation: Early-stage investment is seen as a means of driving innovation and bringing new ideas to market, which is key to long-term sustainability and growth in the proptech sector.

    • Attract high-quality entrepreneurs: The industry attracts high-quality founders with disruptive ideas and creates a dynamic ecosystem for future development.

Diversification and technological integration

  • Expanding artificial intelligence and machine learning: Artificial intelligence and machine learning continue to be at the forefront of technology, reflecting the industry’s focus on data-driven decision making and predictive analytics.

  • The emergence of blockchain and IoT: There is a growing interest in Blockchain for security and transparency and IoT applied to improve building management and operations.

  • Integration with the traditional real estate sector: There is a significant trend to integrate these technologies with traditional real estate practices to simplify processes and improve user experience.

Increased focus on sustainable and user-oriented solutions

Sustainability in the real estate sector: Investors are increasingly favoring startups that incorporate sustainability into their business models, reflecting a broader societal shift toward environmental responsibility.

User experience and engagement: Increased emphasis is placed on solutions that improve the user experience in real estate transactions and management, with an emphasis on convenience, accessibility and customization.

Proptech 2024, where the investments will go

Investors’ attention will focus on nascent startups, especially in the “Seed to Seed Extension” and “Seed to Seed A” stages. This trend is driven by companies’ interest in adopting new technologies to stimulate innovation and reduce operating costs. In addition, the proptech sector is seeing an increase in experienced and competent founders involved in new projects, confirming a startup ecosystem ready for growth and innovation.

Almost half (44%) of venture capital investment in 2024 will go to proptech startups based in North America, with the United States expected to dominate, followed by Europe (17%).

Proptech 2024, investment in AI and Blockchain

Among technologies, artificial intelligence (AI) and machine learning (ML) lead with 35% of technology investment, underscoring the industry’s push for intelligent, data-driven solutions. AI and ML are being used to improve everything from predictive analytics in property valuations to automated customer service and intelligent building management. Their leadership reflects the industry’s commitment to supporting sophisticated, efficient and highly adaptable real estate technologies.

Blockchain accounts for 25% of investments and is gaining ground in the sector’s propts for its ability to offer transparency, security and efficiency, especially in transactions and closing transactions. Blockchain’s potential to revolutionize aspects such as real estate deeds, smart contracts, and even real estate tokenization is therefore gaining considerable attention with resulting investments.

Finally, the Internet of Things (IoT), which accounts for 20% of investments, is increasingly integrated into property management. The role of IoT in improving building operations, energy management and creating connected, intelligent living or working spaces is essential. This level of investment indicates a growing interest in creating more connected and responsive environments in the real estate sector.

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