Brigade REAP is looking to invest in 5 PropTech startups every year

The real estate industry has long painted a picture of one that is solely resource-intensive with little to no involvement of technological innovation. However, thanks to zealous innovators converging technology with real estate, we are witnessing a period of significant modernisation and growth in what was considered the least digitised “traditional” industry.

According to a report by the Indian Brand Equity Foundation (IBEF), the Indian real estate market size is estimated to reach $US 1 trillion by 2030, with an expected compound annual growth rate (CAGR) of 14.6% between FY17 and FY30, and contribute 13% to the country’s GDP by 2025. Combining digital solutions to approach real estate is thus rapidly transforming the industry by using far fewer resources than before and minimising any negative environmental impact.

Record-breaking investments for PropTech

PropTech (or Property Technology) does exactly that - applying information technology innovation to address the needs of the real estate industry. Over the past few years, there has been a significant rise in PropTech companies leveraging technology to solve challenges and simplify the approach to real estate.

Several PropTech startups have adopted sustainability as their objective. Reducing carbon footprint and devising climate-positive strategies to maximise the sector’s potential has been their primary goal. They have developed sustainable technologies to make properties attractive, commercially viable, and environment-friendly. This includes developing high-quality materials, greener cost-effective equipment, and efficient water, waste and power management solutions, to name a few.

WEGoT Utility Solutions, a sustainable PropTech startup, has developed an IoT solution to track water consumption on a real-time basis, saving more than 5 billion litres of water to date. PotholeRaja, a social venture to raise road awareness and make the world pothole-free, has reduced 2040 tons of CO2 emission using affordable eco-friendly methods to fix potholes. Strawcture Eco, a startup that converts agricultural waste into panels, has stored 6000 MT of carbon by saving 900 MT of straw from being burnt. Startups like these have ensured that sustainability and eco-friendly methods remain central to their identity and operations.

Beyond a sustainability focus

Besides an exclusive focus on sustainability, new-age PropTech startups focus on involving AI, robotics, video analytics to disrupt the real estate sector, especially in design, construction and home maintenance. Making the best use of technology, some PropTech startups also focus on management issues, such as air purification, pothole management, logistics, digital marketing, and facility management. Examples of such startups include PropVR (interactive 3D solutions for real estate), MetroGuild (omnichannel communications management), IQ Next (IoT for Smart Building Management), ClairCo (air purification), and Reomnify (building clean datasets for innovators) to name a few.

Employing technology in such a cost-intensive asset class allows PropTech startups to cut down costs and manage time and energy efficiently, mitigating the challenges that hinder real estate companies from scaling.

This is great news for investors and venture capitalists eager to invest in a sector that shows exponential growth with no signs of stagnation or slowing down. The PropTech sector has attracted record-breaking amounts of investment globally, with private investments hitting $32B in 2021, a 28% increase from 2020, according to the 2021 Real Estate Tech Venture Funding Report by the Center for Real Estate Technology & Innovation.

In recent years, global PropTech investments have been increasing at around 36% annually, and post-COVID estimates show that this might increase significantly as more investors and startups look to make the most of the market’s potential.

Brigade REAP taps into the potential

Enabling the growth of PropTech startups has been the focus for Brigade REAP, a PropTech-focused accelerator program helping innovators utilise technology to create sustainable businesses. Having mentored over 55 startups across 11 cohorts since 2016, Brigade REAP has enabled the growth of companies pioneering innovation to solve problems and disrupt the real estate sector.

Investment vehicle PropTech@REAP born

Through their mentoring, over 20 early-stage startups raised 26 rounds of financing, 15 of whom raised funds during the pandemic. However, the REAP team has identified the large gap between the number of early-stage startups with compelling offerings and those that can raise seed money, one reason being the lack of dedicated funds for PropTech startups. This is evident in the Indian PropTech industry because, despite a consistent CAGR (compound annual growth rate) of 57% over the last three years, only 3 out of 88 PropTech startups have achieved unicorn status.

They aimed to bridge this gap by creating the dedicated fund PropTech@REAP, India’s first PropTech syndicate, in 2021, focused on investing exclusively in promising PropTech companies at seed and pre-Series A stage.

PropTech@REAP is looking at investing in 5-7 companies — within the REAP accelerator portfolio and outside — every year. Brigade REAP leads investments in startups looking to raise between INR 50 lakh to INR 4 crore through the fund and co-invest alongside high net-worth individuals (HNIs), angel investors, family offices, and other funds from the real estate community in India.

Success stories

PropTech @REAP has led investments in two path-breaking startups that were oversubscribed in record time.

Strawcture, India’s first company to use bio-composite panels for construction purposes, was oversubscribed in 30 minutes. They develop high-engineered eco-friendly construction panels out of agricultural residues such as bagasse, paddy straw and wheat straw.

Snaptrude, a cloud-based collaborative building design powered by automation and Intelligent BIM, was oversubscribed in only 7 minutes.

PropTech@REAP, along with the accelerator program Brigade REAP, will work to support startups in their journey to disrupt the real estate sector. If you are an early-stage PropTech startup looking to raise funds,