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The Dark Horses of the Start-up Era (A Series): 3 - Proptech
The Dark Horses of the Start-up Era (A Series): 3 - Proptech

June 2, 2021

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The Dark Horses of the Start-up Era: A Series

3. Proptech

Real Estate has been a part of every individual’s life. Whether you buy or sell, lease or rent, real estate has always been one of the prime focus area in everybody’s life.

But the point is when this sector is so important then why real estate management is in the hands of some brokers and agents. These brokers and agents make this property management process tedious and unreliable making the whole process a headache for an individual. Also, the sector is so huge that it can’t be ignored, as per National Real Estate Development Council (NAREDCO), real estate can contribute 13% of India’s GDP by 2025 and can reach $1 trillion by 2030.       

Now here comes a solution in the form of “Proptech”. Proptech is basically the linking real estate management with technology. Usually real estate business model needs personal interaction between different stakeholders but Proptech makes this process ~100% digital. One can sit back at home and can tour multiple properties without actually going there.

Pandemic has accelerated the pain of physical movement which has significantly affect the real estate market but Proptech came as a savior. It not only allows online real estate viewing but also helps in managing related paperwork involved in the whole process.

Now first of all Proptech a global phenomenon and per a research report, 95% of people globally search home online. In India, it took some time to make this model more realistic but it is showing good traction.

Benefits of Proptech:

  • More options to choose from
  • Bringing fairness in the process management
  • Reduction in transaction time and cost

 

Proptech

 

New technology angles are also shaping up the Proptech sector further. The use of Artificial Intelligence, Machine Learning, etc is helping deliver a more customized solution. Property walkthrough and AR/VR can deliver a high-end customer experience. 

Start-ups have taken the onus to take this sector to further heights and investors are betting on them. ~$550 mn was invested in this sector by investors in 2020 and nearly the same was invested in 2019 also. This clearly shows that even during pandemics, investors see a huge potential in this sector. Total investment till date has been ~$2.4 bn spread across 225 deals. If we talk about the growth, Proptech has been growing at a CAGR of over >50% since 2010. Commercial real estate is outpacing the residential market in terms of investment. Investment in the commercial segment is more than 60%.

Many start-ups in this sector have proved their mettle and have shown significant growth even during the pandemic. Real estate start-up, Square Yards saw a 17% y-o-y rise in revenue in FY21 and substantially increased its market share in all segments. The company saw exponential growth in the first few years and then becoming India’s largest digital real estate broker and mortgage marketplace.

Some innovative solutions in Proptech:

  • Owing a fraction of real estate asset
  • 3D view of the property
  • Access to industry experts for property guidance
  • Allowing retail investors to invest in sustainable energy projects

These innovative solutions and success stories are good enough to understand the hidden gem this sector could turn out to be in the future. Let’s wait and watch for another billion-dollar sector to build up.

For other blogs in this series, click on the link below:

#1 Social Commerce: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-1-social-commerce

#2 Spacetech: https://community.nasscom.in/communities/productstartups/dark-horses-start-era-series-2-spacetech

 

 


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