Investment in prop-tech firms up at $551M in 2020 amid pandemic: Report
Investment in prop-tech companies rose marginally to record $551 million last year amidst a surge in adoption of virtual platforms for real estate marketing during the COVID-19 pandemic, according to.
In its report titled 'PropTech: The Future of Real Estate in India,' realty portal Housing.com said $2.4 billion has been invested so far in India's prop-tech industry across 225 deals.
Housing.com is part of Singapore-based Elara Technologies that also owns Makaan.com and PropTiger.
"Investments in the prop-tech segment grew marginally up to $551 million in 2020 from $549 million in 2019," the report said.
This has been the peak investments since tech-based startups in India began entering the real estate segment in India, starting 2000s.
During the lockdown and the subsequent phased opening of the economy, most buyers concluded their property purchases using virtual mediums," said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com, and PropTiger.com.
Investments in the prop-tech segment since 2010 made this possible, he said.
"If these platforms were only popular to find and finalise properties in the pre-pandemic era, the pandemic has changed much of that," Agarwala said.
Housing markets in India would have taken an even more severe hit because of the virus outbreak, and its effects had the prop-tech industry not been gradually growing in the country, he observed.
"Online business platforms that have been on the radar of investors since 2009, have evolved since, from being mere mediums for digital classifieds to offering full-stack solutions towards discovery, advisory, and transactional support," Agarwala said.
The prop-tech segment is likely to see a tremendous boost in the near future amid the growing use of technologies, including virtual reality, drones, big data, and artificial intelligence in home purchases, the report said.
It, however, pointed out that a majority of business is still conducted through the offline mode in the property brokerage business in India, estimated to be a $1.4 billion industry.
"Even with the actual transaction culminating offline, over 50 percent of the real estate buying decisions take place through online searches," the report said.
With the growing internet user base that is expected to increase up to one billion by 2025, the opportunity for players in this segment is colossal, it added.