Global Real Estate Tech’s funding makes a slow start in Q1 after a record 2016

Investments into Real Estate tech companies hit a five-quarter low in Q1 2017 with only $179.7m committed across 17 deals.

  • Q2 2016 was the biggest quarter since the beginning of last year with over $1.2bn worth of funding. This is over $150m more than the other four quarters in the period combined.
  • The number of deals continued to decline QoQ from 42 in Q1 2016, to only 17 in the opening quarter of the year.
  • Q2 2016’s record funding was driven by China-based company Home Link (Lianjia), which raised $1.08bn in the period.

Residential & Commercial Real Estate tech companies received the most deals since 2014

  • Residential & Commercial Real Estate companies attracted more funding rounds than any other sub sector within Real Estate tech during 2014-Q1 2017 with 31.3% of the deals.
  • Property Investment platforms also raised a high share of deals with 18.9%.
  • 24.8% of deals went to ‘Other’ Real Estate companies, which includes property maintenance services, predictive and property valuation tools, Real Estate lending services, as well as services that facilitate the buying of industrial Real Estate.

2016 saw Asia lead the way for Real Estate tech investments for the first time with over half of the sector’s funding

  • Asia’s share of total funding to the sector grew rapidly last year, reaching 56.6% up from 29.6% in 2015.
  • On the contrary, Europe’s share of total Real Estate tech funding declined continually falling to 7.1% in 2016, less than a third of 2014’s share. This is because, while overall funding to Real Estate grew over four-fold since 2014, funding to European companies increased by just 21.5%.
  • North America’s share of funding decreased dramatically due to the big funding rounds going to Chinese companies last year. It was the first year North America’s share of Real Estate tech funding fell below Asia’s share.

Later-stage deals continued to take greater share of Real Estate tech investments, reaching 26.4% in 2016.

  • The proportion of later stage deals (Series B and above) more than trebled since 2014. In 2016 almost one-fifth of deals were Series B, up from a share of less than 10% in 2015.
  • The share of funding rounds going towards seed deals fell to nearly half of the sector’s overall total in 2016, a decrease of 9.9% since 2014.
  • Last year the Real Estate tech sector saw Series D deals for the first time. The largest one went to online home-selling service Opendoor, which raised $210m in December 2016.

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

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