Funding for proptech start-ups retains sheen in country

“The tech community of India has produced some of the most innovative solutions in different industries. Its proptech scene has great potential as well as deep engineering expertise and this is also why JLL partnered with Invest India to launch India’s biggest proptech accelerator - JLL IDEAs last year,” said Ramesh Nair, CEO and country head, JLL India.

Last year, proptech start-ups in Asia Pacific raised USD 625.9 million, according to research by JLL and tech media firm Tech In Asia. Deal count fell across the board to 38 deals in 2019 compared to 50 in 2018.

“We wanted to get a sense of the Asia Pacific proptech funding scene now compared to two years ago when we first commissioned Tech In Asia to produce ‘Clicks and Mortar: The Growing Influence of Proptech’. While India has witnessed an increase in investor interest, fresh data from their sources show that there’s been a significant decline in funding in Asia Pacific,” said Jordan Kostelac, director of proptech, JLL Asia Pacific.

“These figures are only indicative of VC interest and they’re less reflective of what’s truly happening in our industry. In our work with clients and fellow corporates, we are seeing that interest in proptech in Asia Pacific continues to grow, with traditional players taking a strategic, integrated approach with start-ups instead of the VC investment route, ” Jordan added.

“The real estate industry has been relatively late to the tech revolution, which has given major corporates and other real estate firms a greater runway to innovate and invest internally in technology. And in Asia Pacific, where corporate tech adoption is very quick due to the dynamic nature of the markets, many companies are entering partnerships while increasing trials and deployments of new technologies in their portfolio. For instance, JLL has an extensive suite of tech solutions and we set up a global Centre of Expertise for Technology, Data and Information Management two years ago in Bengaluru to develop new solutions harnessing the latest technologies available,” Kostelac further said.

Bright spot in pre-series A and India’s proptech scene

Pre-series A start-ups experienced the biggest increase in funding from USD 12 million to USD 26.1 million, a rise of 117.5 % year-on-year. India, too, bucked the overall trend as proptech funding grew nearly 17 times from USD 3.4 million in 2018 to USD 56.8 million in 2019.

Kostelac further projects that real estate firms will be looking to invest to tackle the tough issues of data privacy and how to use technology to achieve greater sustainability in the built environment. “We’re living in an age where data is easily collected and data privacy needs to be taken seriously. Building owners and occupiers have to ensure adequate protection and proper management of their data,” Kostelac said.

“Similarly, there is an increasing demand to ensure Environmental, Social and Governance (ESG) metrics are met in buildings and the wider real estate industry. Well-employed proptech solutions, like platforms to track and benchmark energy consumption in buildings, have the power to deliver clear sustainability benefits on these fronts.”