building and ownership Homes have been a part of human life for as long as civilization itself. But over the past few decades, the lens through which we view real estate and property development has gradually blurred.
As technology increasingly permeates real estate development and housing today, it is the companies operating in this space that can pinpoint exactly what is happening in the rapidly developing world of proptech. It is no exaggeration to say that there are few other than that.
To pull back that veil, we decided to take a closer look at trends and technologies in property development and construction as we head into the end of 2022. We spoke to various investors about finance-focused proptech and the move towards greener proptech.
But it’s impossible to get a complete picture of the proptech space without delving into the technology that’s driving so much change, so I asked Momei Qu, Managing Director of PSP Growth and AJ Malhotra, Managing Director of Insight Partners. I interviewed. They spoke extensively about the latest technology in real estate and residential development, as well as other trends that are likely to cause the next disruption.
(Editor’s Note: This interview has been lightly edited for length and clarity.)
TC: There is a lot of overlap between construction technology and prop technology. What do you think is the difference between the two? And where do they overlap?
Song Moe clothes: We didn’t coin the term, but we like to use “built world” or “built environment” to describe both categories. Traditionally, we refer to construction technology as a touch-in-construction solution (i.e. site, field-level technology aimed at AEC as the end customer) and proptech as a post-construction touch solution (i.e. , office building tenant engagement, rental property management).
They overlap when there are things of value that apply across the lifecycle, such as construction data about plumbing that can be used for facility management, or equipping units as “smart homes” during the construction phase.
AJ Malhotra: I think of construction technology as a subset or segment of prop technology. By my definition, proptech is any technology involved in the entire lifecycle of a physical structure, including land acquisition, construction planning, construction execution, financing, leasing, property management, insurance, and repairs.
Construction technology falls into the planning and execution bucket in our example, and can also be concerned with financing (such as construction loans) and repairs.
What are your investment themes for proptech in 2023? What kind of growth do you expect in this area?
what: In some ways, the sector has been disproportionately hit harder than others by the broader tech market reset in 2022. Several proptech companies have been valued above $1 billion through private funding or SPACs, but virtually none currently maintain valuations above $1 billion.
What made the situation worse was the general bloat of multiples in technology/software and the fact that many proptech companies have physical components that shouldn’t be valued like software companies in the first place. I think it’s a double blow. .
In 2023, I think investors and companies will likely exercise more discipline and not raise too much capital until they find products and sales efforts that actually work. As such, we typically don’t get involved until we see significant traction anyway. If they can show some momentum and traction in this environment, we will be very happy to join them.
Malhotra: Proptech in 2023 will certainly be challenged, mainly for two reasons.
