The real estate sector, which is rebounding from the lows of the Covid pandemic, has begun leaning more heavily on technology to streamline its operations and make them more efficient and sustainable. Within this space, a host of real estate-focused startups are serving various sub-segments of the industry such as sales, construction, finance, and sustainability.
With the government’s big push to the startup ecosysten in India, the number of proptech enterprises have grown at a compounded annual growth rate (CAGR) of 200 per cent, to over 1,400 in 2022 from just two in 2016, shows a study by consulting firm Anarock.
“At present, proptech startups in the country are at various phases of their life cycles. While 30 per cent are currently in the pre-seed stage, 56 per cent have already been successful in raising funds from investors. Several others are currently at the validation stage, seeking to establish the proof of their concept.
Many of these firms are likely to progress to the fund-raising stage soon,” said Prashant Thakur, Senior Director-Research, Anarock.
Thakur added, that many realty startups are on the verge of attaining unicorn status, and that today, proptech accounts for about six per cent of the total recognised startups in the country.
Anshuman Magazine, chairman & CEO India, South-East Asia, Middle-East & Africa, feels that the integration of advanced technologies has been making its way into the real estate space for some time, with the onset of the pandemic accelerating the call for technology inclusion.
The need for cost-effective, efficient, and faster construction has enabled the use of innovative construction technologies. This is evident from the share of startups focusing on this segment-–a massive 57 per cent.
“Based on technologies like SaaS, IoT, augmented reality and virtual reality that are applicable across the life cycle of construction, we have observed that startups in the construction, property management and portfolio optimisation spaces have been prominent for the past two years,” Magazine said.
According to Anarock, 13 per cent of the total recognised proptech startups focus on residential real estate.
Apart from the residential, construction or commercial segments, startups have gained traction in co-working spaces too, driven mostly by the needs of hybrid or remote business operations.
Aditya Mehta, CEO, Akasa co-working, feels that cutting-edge technologies have the potential to significantly transform the country’s co-working spaces and players in this space have begun emphasising more on leveraging technology to create conducive working environments for employees.
“We, as a startup in the industry, have come a long way in the past two years, from just one centre to now seven, and in the next 2-5 years the number is expected to increase exponentially, with a growth rate of 2x or at least 1.5x every year,” Mehta said.
According to experts, online portals for buying, renting and selling properties have also revolutionised real estate space not just by eliminating brokerage but also by making it a convenient and hassle-free experience with its services.
“During the pandemic, proptech saw a major boom because the offline channel for house hunting lost relevance and people got habituated to searching for homes/properties on online platforms,” said Amit Kumar Agarwal, CEO and co-founder, NoBroker.com, a proptech unicorn.
NoBroker helps customers find properties through features such as travel time search. It also helps them discover the right rent/price of the property, Agarwal said.
Another Mumbai-based CEO feels that proptech startups have influenced property search and discovery, online property transactions, property management, and home design and renovation, further facilitating the growth of the industry.
“As a proptech startup, we are empowering a new generation of real estate investors by allowing users to complete a transaction in just a few clicks,” said Aditya Jhaveri, founder and CEO, Blox.
Experts said the sector, which has been agile in meeting the evolving needs of investors, developers and occupiers, is set to see a surge in the number of proptechs, as these enterprises are gaining increasing acceptance following the breakdown in the decades-long state of inertia.
Proptech startups are expected to be future growth drivers of the realty sector. They the potential to create a positive and sustainable impact in the real estate ecosystem, Magazine said.
Thakur added that as Indian real estate gears up to become a $1 trillion industry by 2030, the prospects for this offshoot of the technological revolution are more than promising.
|Proptech unicorns in India (top3):|
|Unicorn||Segment||Valuation (in $)|
|Ofbusiness||Construction solutions||>4.8 billion|
|NoBroker.com||Listing platform||>1.1 billion|
|LivSpace||Online Interior designs||>1 billion|
|Sub-segment||Share (In %)|
|Source: Startup India website, compiled by Anarock|
|Other proptech startups||Segment|
|Square Yards||Digital lending|
|Stanza living||Co-living space|
*Exact valuation of above startups was not available.