Tech Start-Ups Boom Across Real Estate in Post-Pandemic Era
Number of proptech enterprises have grown at CAGR of 200% to over 1,400 in 2022, from just two in 2016, shows Anarock study
8 February 2023
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Jayashri Ghorpade
The real estate sector, recovering from Covid, is relying more on technology to improve efficiency and sustainability.
A study by Anarock reveals that the government's support for startups in India has resulted in a 200% CAGR increase in proptech enterprises, growing from 2 in 2016 to over 1,400 in 2022.
Startups are making a impact not only in residential, construction, or commercial segments but also in the co-working space industry, driven by hybrid or remote businesses' needs.
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.
A study by consulting firm Anarock shows that the government's push towards the startup ecosystem in India has led to a 200% CAGR in the number of proptech enterprises, rising from only two in 2016 to over 1,400 in 2022.
Currently, proptech startups in the country are at different stages of their lifecycle. 30% are in the pre-seed stage and 56% have already raised funds from investors. Some are still at the validation stage, trying to prove 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.
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Anshuman Magazine, CEO for India, South-East Asia, Middle-East & Africa, says the real estate industry has been incorporating advanced technologies for some time, but the pandemic has hastened its integration. The demand for cost-effective, efficient, and faster construction has driven the use of innovative construction technologies, with 57% of startups focusing on this segment.
“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.
Startups have not only made an impact in residential, construction or commercial segments, but also in the co-working space industry, driven by the needs of hybrid or remote businesses.
Aditya Mehta, CEO of Akasa co-working, believes that technology can greatly transform the co-working industry in the country. Startups like Akasa have started focusing on using technology to create better working environments for employees. From one center to seven, Akasa has made significant progress in the past two years and is expected to grow exponentially, with a growth rate of 2x or at least 1.5x every year in the next 2-5 years, says Mehta
Experts say online property portals have transformed the real estate market by eliminating brokerage and offering a convenient, hassle-free experience.
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