TORBIT PROPTECH TRACKER: Boom in Realty-Focused Startups

For far too long, the real estate sector had stubbornly held on to age-old conventional models and practices of planning, management, construction, project execution, and sales. This may be due to the underlying risk of high asset value and large investments required to explore new methods, But post-Covid pandemic, the need to increase efficiencies and ensure sustenance and rapid scalability hastened the digital technology adoption, leading to a boom in prop-tech and real estate-focused startups.

Today, PropTech has become a boon to every kind of real estate sector stakeholder from landlords to tenants and investors to brokers. Technological disruptions using various platforms and technologies have far-reaching impact. According to Forbes, 95% of buyers engage on online platforms at the discovery stage of their home-buying journey, and 51% buy property online.

The number of PropTech startups in India have grown at an impressive CAGR of 200% since the government announced the Startup India Campaign in 2015. From just 2 in 2016, real estate startups soared to over 1400 in 2022. Real estate-focused startups are serving various sub-segments of the real estate industry ranging from sales, construction, finance, and sustainability.

Among those that have attained unicorn status, real estate sector-focused startups are increasingly achieving this coveted milestone. As of today, PropTech accounts for 6% of the total recognised startups in the country.

Source: Startup India, Compiled by ANAROCK Research

Data till Sept.2022

Residential real estate accounts for 84% of the total value of under-construction real estate in the country. However, only 700-800 companies account for 13% of the total recognised PropTech startups focused on housing. There is obviously significant upside potential that needs to be leveraged.

Today, PropTech startups in the country are at various phases of their lifecycles. While 30% are currently in their pre-seed stage, 56% have already been successful in raising funds from investors. Many others are currently in the validation stage, seeking to establish the proof of their concept, and many of them are likely to progress to the fund-raising stage soon.

Source: Startup India, Compiled by ANAROCK Research

Today, the leading real estate players are finally open to using advanced technologies like construction automation, tech-driven sustainability, and prefabricated materials. With ConTech (construction technology) real estate companies are taking to innovative construction technologies for cost-effective, efficient, and faster construction.  This is evident from the share of startups focusing on this segment reaching at massive 57%.

Source: Startup India, Compiled by ANAROCK Research

As PropTech gathers momentum, it will gain increasing acceptance, breaking the decades-long state of inertia. As Indian real estate gears up to become a USD1 trillion industry by 2030, the prospects for this exciting offshoot of the technological revolution are more than promising. –  Prashant Thakur, Senior Director, Anarock