The new Proptech and Contech index has just been released. A good way to measure interest in the real estate and construction sector. And it’s getting stronger and stronger: more than 880 million euros have been raised for the two sectors!
Strong growth in funding rounds
In the first three months of 2022, European startups Proptech and Contech raised a total of 880 million euros. This is 5 times more than a year ago for the same period, and it already represents 50% of the total amount raised in 2021 (1.6 billion euros). What has really changed is not the number of fundraisers — 108 rounds were registered in the first quarter of 2022, compared to 101 in the fourth quarter of 2021 — but rather the size of those rounds: In 2021, startup Proptech/Contech announced an average of 4.6 Euro. million funds raised, compared to more than €8 million in the first quarter of 2022.
This shows that this very early ecosystem is gradually being structured, both with the arrival of new investors capable of deploying at all stages of maturity – from seed round to growth rounds, and with the growth of the first expansions capable of attracting new investors. subsequent rounds (in the first quarter of 2022 there were 5 rounds worth more than €50 million and 15 rounds worth between €20 million and €50 million, compared to 9 and 20 respectively for the whole of 2021).
Contech is developing very strongly.
Even within specific real estate and construction verticals, some topics attract more investors than others. The index confirms the growth of Contech (the Design & Build category, which includes site management tools, low-carbon concrete, modular construction, etc.) during the first quarter with 31% of all funding rounds compared to an average of 24%. last year.
Along with market segments already well-known to investors, such as property management software (9 towers in the first quarter of 2022, including, for example, the A Homeland series in France or Seed RoomMate in Luxembourg), we are also seeing the emergence of new very dynamic verticals. such as smart home solutions (11 towers, including the B-series of the Swedish company Minut) or the supply of tools for construction sites (8 towers, including the B-series of the German Contech Cosuno worth $30 million).
The rise of influential startups
In other good news, the share of fundraising by startups that are considered “efficient” (that is, with a value proposition focused on sustainability or reducing inequality) has also increased significantly. It is 30% in the first quarter compared to an average of 18% in 2021. The best example comes from Deepki, a French startup that raised the quarter’s largest funding round with a €150m Series C. aims to develop its tool for monitoring data on carbon emissions from buildings.
However, the proportion of startups founded by women that raised funds during the quarter remains very low (13% of funds raised) and slightly lower than in 2021 (16%).
France, Germany and the UK concentrate 66% of fundraising.
In terms of the geographical distribution of funds raised, activities continue to focus on the largest real estate markets, which coincide with the most dynamic European economies. Only the UK, Germany and France raised more than half of the funding rounds raised in the first quarter (65 out of 108 rounds) and raised 66% of the capital.
Apart from these flagship markets, Spain (10 deals) and the Nordic countries (14 deals in total for Norway, Sweden and Finland) also stand out for their high activity.
Investors prefer software and trading platforms
Finally, in terms of technology, the index shows that investors are more focused on software models that are easier to scale than hardware solutions.
SaaS (Software-As-A-Service, 25 rounds – 16% investment) or Marketplace (27 rounds – 19% investment) solutions raised the most capital, while startups relying on hardware technologies (new materials, new building processes , Internet of things, etc.), collect only 33% of the total investment.
These impressive numbers illustrate the strong growth of the Proptech & Contech ecosystem, which is still fragmented in Europe, especially compared to the United States, but is slowly starting to take shape.
In the coming months, it will be interesting to see how the global and European economic situation (return of inflation, war in Ukraine, etc.) will affect the amounts raised, given that the contraction is already being felt in the most mature market. segments since the beginning of the year.
Methodology : The Proptech & Contech Index is based on Axeleo Capital analysis, as well as databases such as Dealroom and Crunchbase. These data sources mostly collect information about transactions and cycles that have been made public – there are many other increases going on, but no announcements or amounts reported (so hard to track). The analysis is limited to companies with fewer than 250 employees, established after 2010, headquartered in Europe and whose value proposition is focused on the real estate and construction sectors. The index only considers venture capital raising (i.e., excluding debt, grants and non-equity financing).
This new index has just been launched by Axeleo and RENT 👏
Find the original article in English here