Investments in Real Estate Tech companies slowed down in the first half of the year after a record 2016

A total of $2.21bn was invested in Real Estate Tech companies last year – more than double the funding in 2015

The strong growth in Real Estate Tech investment in 2016 was mostly due to two large deals to the Chinese online real estate agency Home Link totaling $1.08bn. Taking into consideration only deals valued under $100m, investments in Real Estate Tech still increased at a CAGR of 20.7% between 2014 and 2016. Further, only 43.8% of the $920m invested in deals under $100m last year was invested in the first six months of 2017. Alongside this slow start for deals in that size segment, 2017 has yet to see any large deals closed in this sector. Additionally, the number of deals closed to Real Estate Tech companies fell by 13.7% between 2015 and 2016. This fall looks set to continue with only 42 deals closed in this sector in the first half of the year.

FinTech investments to Real Estate Tech companies has remained stagnant in the last four quarters

  • Q2 2016 was a record quarter for investment in Real Estate Tech due to the $594m Series B round and the $486m funding closed by Home Link. However, considering only deals valued under $100m, investments in Q2 2017 were up by 11.6% YoY.
  • In Q4 2016 the third $200m+ funding round of 2016 was closed. Opendoor, a San Francisco-based company which aims to streamline the home sales process, received $210m in series D financing from Northwest Venture Partners and seven other investors.
  • Investments to Real Estate Tech companies valued under $100m have gradually increased since Q4 2016 when only $178m was committed. Q2 2017 saw deals to the sector totaling $221m, an increase of 21.4% compared to the previous quarter.

  • The total number of deals fell by 52.2% between Q2 2016 and Q2 2017. Corresponding with this fall in the number of deals, the average deal size for deals valued under $100m has increased by 90.9%.

More than 75% of the total amount invested in Real Estate Tech companies in H1 2017 went to the top 10 deals

  • The Top Ten deals received a total of $309m of investment in H1 2017. This is 76.7% of the total amount invested in Real Estate Tech companies in H1 2017.
  • Cadre received the largest deal of H1 2017. The New York-based company allows investors to invest in institutional quality real estate. The firm received $65m in Series C funding in June of this year.
  • Seven of the top 10 biggest deals went to companies based in the United States with the remaining three; Credit Peers, Yopa and Appear Here all based in London.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global

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