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Alternative Market Briefing

Private equity, venture capital investments in real estate tech post record: Preqin

Monday, July 22, 2019

Laxman Pai, Opalesque Asia:

Private equity and venture capital investment in real estate tech has posted a record run over the past 4.5 years, with 905 deals valued at an aggregate $30bn, said Preqin.

Unicorn and tech-advanced shared workspace provider WeWork Companies Inc. has been a large beneficiary of this private capital investment, commanding a staggering $47bn valuation following recent funding rounds from industry giants such as Softbank and Hony Capital.

That being said, venture capitalists and private equity professionals have not always been keen on investing in real estate and the surrounding technology, pointed out a report from Preqin.

A mere 60 private equity-backed transactions took place in 2010, amounting to just $2.0bn in aggregate value. Fast-forward to 2016 and the global real estate tech market peaked, with 222 deals worth an aggregate $8.5bn. This was more than double the figures from three years prior.

Climbing investment activity paired with consistent new entrants into the ecosystem shows good signs for the next phase of real estate technology, the report said.

Looking ahead, 2019 is on pace to exceed last year's healthy total deal value figures, with $3.7bn already recorded thus far. However, only 58 deals have been completed year to date.

Technology is influencing every aspect of the real estate market. With advanced mobile applications and online platforms, companies are transforming the way consumers and prospective te......................

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