PropTech disrupting life and the environment
Property technology is becoming more attractive for investors in the DACH region.
The DACH region of Europe consists of Germany (D), Austria (A), and Switzerland (CH). The gross domestic product (GDP) of all DACH countries was roughly 5.52 trillion US dollars in 2021
Digitalization is advancing in various industries and disruptive business models in particular are receiving a lot of attention from investors. This is no different in the PropTech segment, as it already exceeded the previous year's volume for PropTech investments. In 2020, approximately 283.5 million euros were invested in PropTech in the DACH market. In the first half of 2021, the investments surpassed the previous year with a few millions. In the year 2021, these PropTech sectors got the biggest investments, as it follow: sales and marketing 15.07%; smart building 20,55%; planning, construction and refurbishment 26,03%; concepts and services 13,70%; investment and transactions 10,96%; and operations and managemet 13,70%.
Financing Volume of PropTech in the DACH Region 2016-2021. Source: blackprint.
The PropTech sector in Germany is continuously evolving, indicating that in the following years we will see more innovation and technological implementation in the German PropTech sector. Prices have been rising because of the lack of office space in major cities. The worldwide market has found its residential, healthcare, and hospitality sectors to be particularly appealing as an investment opportunity. The expanding real estate industry offers greater opportunities for property technology. Keeping this in mind, we can draw an image regarding the possibilities for Protech in Germany.
In terms of technical advancement and digital transformation, the real estate industry is one of the late adopters, remaining behind many other industries. However, the Fourth Industrial Revolution and the Covid 19 pandemic, helped to accelerate this long process.
Several sub-sectors such as residential and commercial real estate buying and selling, leasing, legal services, and so on, have been substantially transformed. PropTech was born with the rise of the internet resulting in digitization of information, this replaced the traditional property listings. Later on with the apparition of smartphones and ultimately the apparition of blockchains, specifically smart contracts, PropTech got to the point that it is today. Building technologies and procedures, high-tech materials, construction processes, machinery, and the impact of big data, machine learning, and artificial intelligence on building, maintenance, and planning have all begun to disrupt the sector.
Germany is well known for the chances that it offers in the real estate investment and is sometimes referred to as a safe heaven for global capital. However, UK still remains the leader as a PropTech investor, the Scandinavian countries being placed on the third place. In Germany, private firms, entrepreneurs, business angels, and the government are the primary investors in PropTech ventures. Claudia Nagel (High Rise Ventures), Marius Marschall (PropTech 1 Ventures), Investis, 32nd Floor, High Rise Ventures, BitStone Capital, High-Tech Grunderfonds (HTGF), and Bayern Kapital are the primary investors.
Here are some of the top 10 PropTech companies in Germany that some of the above mentioned enterprises invested in:
Exporo - an online real estate crowdfunding platform for the retail sector (last investment in 2019 of approx. 43 million euros)
McMakler - a full-service real estate service provider active in Germany and Austria for the commercial sector (last investment in 2020 of aprox. 42 million euro)
Lamudi - an online real estate classified website focusing on emerging markets for the residential sector
ZenHomes - a provider of the cloud-based property management platform for retail sector (last investment in 2020 of approx. 50 million euro, the largest transaction)
Homeday - an online brokerage firm for buying/selling of real estate properties leveraging a data-based algorithm for the online valuation of real estate properties for retail sector (last investment in 2020 of approx. 40 million euro)
Casavi - a customer communication and service portal solution for property management companies and housing cooperatives connecting tenants and property managers utilizing a mix of digital channels for the retail sector (last investment in 2021 of approx. 20 million euro)
Wunderflats - a property renting platform for furnished rentals for the residential sector (last investment in 2021 of approx. 17.8 million euro)
Klarx - a digital platform for construction equipment and heavy machinery rental for the commercial sector (last investment in 2019 of approx. 12.5 million euro)
GridX - a platform that provides a standardized interface to distributed energy resources for the commercial sector (last investment in 2021 of approx. 11 million euro)
Envio - develops cloud-based building technologies for existing commercial buildings for the commercial sector
