European PropTech Trends 2020

EXECUTIVE SUMMARY

• PropTech and ConTech have been growing by 45% annually (CAGR) in Europe since 2014.
• Financing rounds in the now double-digit millions are evidence of the increasing maturity of the sector.
• UK is the European leader in terms of financing volume and number of deals. The DACH region, France, Spain, and the Nordics follow behind.
• The still relatively young PropTech sector has predominantly not yet reached the late stage, which is why the largest financings are still to come.
• The coming-of-age phase, in which PropTechs were playfully tried out, is over; the sector will increasingly have to convince with measurable efficiency gains in the real estate core business starting in 2020.

FUNDRAISING OVERVIEW

Whereas in 2014 only 77 million euros were invested in startups dedicated to the digitalization of the real estate industry, by 2019 this figure has risen to just under 500 million.  Accordingly, it can be assumed that the financing volume for 2019 will be at an even higher level than the 499 million euros indicated here (displayed with hatched lines).

TREND DEVELOPMENT

Needless to say, the interest in a tech segment cannot be expressed in figures based on the financing volume alone. It is also worth taking a look at the general interest of the public. This can be made tangible by evaluating the number of Google queries for the search term “PropTech”. The results show that interest has increased continuously. This is in line with the perceived attention paid to the sector by articles and publications in startup media and real estate trade journals.

BEST-FUNDED STARTUPS

The map below provides a rough overview of selected PropTech startups that have accumulated the highest amounts of equity in their respective countries over the last five years. It should be noted that only equity financing is taken into account for which precise financing amounts have been published.

GEOGRAPHIC DISTRIBUTION ACCORDING TO INVESTMENT VOLUME AND NUMBER OF COMPANIES FOUNDED

Cumulative figures over the last five years. On the map on the right, we would like to present a comprehensive overview of the investment volume distribution by European countries/regions. As this report is being published for the first time, we have decided to summarize the financing volume of the last five years broken down by country/region.

The United Kingdom takes the lead. In a direct comparison with other tech sub-segments, it is noticeable that the United Kingdom can claim an even higher share of the European total investment volume than is usually the case in the startup sector. It remains to be seen whether Brexit will stop this trend.

Other more populated regions follow at some distance. The DACH region, i.e. Ger- many, Austria and Switzerland, is in second place, with France only in third place. Spain’s relatively high share of the European Prop- Tech financing volume is rooted in the last two years, during which the country has generated an unusually high number of top PropTech investment rounds when compared to the average Spanish investment levels of previous years.

The number of PropTech startups by region is more balanced. The number of PropTech startups presents a somewhat different picture: The United Kingdom, the DACH region, and France are again leading Europe, but are closer together when compared to the financing volume – closely followed by Spain and the Nordics region. In the Nordic countries, there is a large discrepancy between the volume of funding and the number of startups founded, which suggests that the ecosystem is pronounced, but still young.

Pan-European orientation is common. In addition to the regions already mentioned, the data available allows us to identify Italy (fueled by a recent top investment round of the Italian iBuyer casavo), Portugal, and the Benelux countries as further “PropTech hot- spots”. Overall, however, it should be noted that many PropTechs are founded with a pan- European focus and address different markets, so the mere location of the headquarters does not necessarily coincide with the business activity in the respective countries.

Source: PROPTECH1 VENTURES