Funding in Indian PropTech firms reached $719 million despite experiencing a slight dip in 2022. The report by Housing.com highlights that the PropTech industry accumulated nearly $4 billion in investments between 2009 and 2022, boasting a compounded annual growth rate (CAGR) of 49 percent despite global economic uncertainties.
Dhruv Agarwala, Group CEO of Housing.com, PropTiger.com & Makaan.com, commented on the sector's performance, noting, "Investments in the PropTech space remained stable throughout 2022, even amidst global turmoil. 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."
While overall funding in PropTech firms saw a marginal decline from $742 million in the previous year (2021), specific segments within the industry attracted substantial investor interest.
Notably, shared economy platforms, such as co-living and co-working spaces, secured the majority share, accounting for 64 percent of the total fund inflow. Investors are increasingly confident in the growth potential of these segments, which offer flexible workspace solutions and premium rental accommodations, the report stated.
Additionally, PropTech players providing construction technology solutions received 15 percent of the total funding in 2022. This trend reflects the growing emphasis of real estate developers 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 pointed out that "the coworking segment has witnessed rapid expansion in the last three years, driven by the escalating demand for flexible workspace solutions from corporates."
The co-living segment faced challenges during the COVID-19 pandemic due to the temporary closure of schools and colleges. However, it 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.
The report further highlighted the significant growth in Proptech investments in India between 2009 and mid-2023. The Shared Economy Sector emerged as the frontrunner, comprising 40 percent of total investments, followed by Sales & Marketing with a 24 percent share.
In the first half of 2023, the Proptech investments in India surpassed the $4 billion mark since 2009, highlighting the sector's continued growth and transformative potential.
Ankita Sood, Head of Research at Housing.com, PropTiger.com & Makaan.com, shared her insights on the report, stating, "India's PropTech sector is thriving. Despite global headwinds, investments in 2022 reached $719 million, just shy of its historic peak. Demand-side tech adoption is clear, with investments coming in sales, marketing, and the shared economy. Supply-side tech is also accelerating, with construction technology receiving $109 million, or 15 percent of total investments in this period."
Sood further added, "The last half-decade or so has seen tremendous growth in investments, indicating that India's PropTech sector is a bright spot in the global market. Today, tech is being used across all stages of the real estate lifecycle, from finding a property to closing the deal. This is also cutting time and pricing, making processes for all stakeholders more efficient and streamlined."
