Global Proptech Market

Global Case Study: Proptech startups benefit from transparency of data and tech-heavy climate

US & UK: Government efforts to enforce transparency of data enables proptech growth

In the case of the US and UK where proptech first developed, proptech companies were able to benefit from government policies encouraging transparency of data. In 2009, Obama introduced the Open Government Initiative which facilitated active communication of information, and in 2010, the UK government created the Open Government License enabling commercial access to a wide range of real estate data. Even recently, the UK government is continuing to support the proptech sector through the release of public sector data. The Ministry of Housing, Communities, and Local Government announced in 2019 that the ministry is planning to introduce a national index of all brownfield data with the probability of creating a digital product with relevant data in a consistent, usable format. As a result of continued government interest and support, the proptech sector in the UK is estimated to be worth £6B per year and is growing.

China: Home ownership demand combined with government funding leads to proptech growth

Levels of home ownership among Chinese millennials are high, substantially exceeding home ownership levels of millennials in developed markets and the rest of the Asia-Pacific. Up to 100% of Chinese millennials own their own houses, and up to 94% plan to buy property within five years. This strong desire for house ownership among tech-savvy millennials has led to growth of property brokerage and leasing platforms as well as property management solutions in mainland China. Increased demand for these solutions, combined with the government’s continuous support for startup growth enabled the proptech market to grow exponentially. Multiple programs were launched to incubate startups and the number of government operated accelerators has dramatically increased from around 500 in 2005, to around 5,000 in 2020. As a result of such efforts, the Chinese protech market has prospered. It now composes a large proportion of the Asia Pacific proptech market, with China receiving nearly 60% of Asia Pacific funding from 2012-2017. Beike Zhaofang, the biggest housing transaction and service platform in China, gained attention worldwide after its initial public offering in August 2020 (only 2 years since the service launch in early 2018) and showed the growth potential of Chinese proptech companies. Valued at around $22B at its IPO price, the company’s market cap is now over $103B.

Germany: Proptech companies benefit from abundant funding opportunities

In Germany, proptech firms were able to take advantage of the flourishing startup environment backed by abundant R&D resources and funding opportunities. Venture capital firms like Highrise Ventures and PropTech1 Ventures specialize in proptech, creating a healthy investment environment. The introduction of organizations like PropTechDach and The German PropTech Initiative encourages growth of the proptech market by fostering collaboration of proptech firms as well as cross-sector cooperation between real estate and construction industries.