Build and own Homes have been a part of human life for as long as civilization has existed. But over the last few decades, the lens through which we look at real estate and property development has gradually blurred.
As technology expands into real estate and housing today, it’s not a stretch to say that few outside of the industry can pinpoint exactly what’s happening in the fast-growing world of proptech.
So we decided to take a deep look at the trends and technology in property development and construction to pull back that curtain towards the end of 2022. We spoke to a variety of investors about finance-focused proptech and the move to greener protection.
But since we can’t get a full picture of the proptech space without driving a lot of changes in the technology, we interviewed Momei Qu, managing director of PSP Growth, and AJ Malhotra, managing director of Insight Partners. They talked extensively about the latest technology in real estate and housing development, the next potential disruption and other trends.
(Editor’s note: This interview has been lightly edited for length and clarity.)
TC: There is a lot of overlap between construction tech and proptech. What would you say is the difference between the two? And where do they overlap?
Momi Koo: We didn’t coin this term, but we like to use “built world” or “built environment” to capture both categories. We have traditionally referred to construction technology as solutions that touch objects while they are being built (ie, jobsite, field-level technology with AEC as a primary client) and proptech as solutions that touch after construction (ie). , tenant participation for office buildings, property management for rental properties).
They overlap when there is something of value that can be applied across the entire lifecycle – building information around pipes that can be used for utility management, or setting up a unit as a “smart home” during the construction phase.
AJ Malhotra: I think of construction technology as a subset or division of proptech. In my words, proptech is a technology that affects the entire life cycle of a physical structure, including land acquisition, construction planning, construction execution, financing, leasing, property management, insurance and maintenance.
Construction technology falls into planning and execution in the examples I just mentioned, and can touch on financing (for things like construction loans) and maintenance.
In the year What is your investment research for proptech in 2023? What kind of development are you expecting in the sector?
what The sector has been hit by 2022, in some ways more disproportionately than others, with the broader tech market reset. Several proptech companies have been valued at more than $1 billion through private financing or SPACs, and almost none are valued at more than $1 billion today.
I think what makes it worse is the general overhyped duplication in tech/software and the fact that many proptech companies have physical entities and should not have been allowed to be valued as software companies to begin with. .
In the year I think in 2023, investors and companies will be more disciplined, and they won’t raise much capital unless they really have a working production and sales activity. As a growth-stage investor, we won’t get involved until we see significant traction anyway, and if you can show drive and motivation in this area, we’d be more than happy to support you in a big way.
Malhotra: I think PropTech will definitely be challenged by 2023, mainly for two reasons.