By Barbra Murray
Last year was an active period in commercial real estate technology, and the details are all broken down in CREtech’s 2017 End-Year Report, which indicates that there’s much more to come as the sector approaches a watershed period in its lifecycle.
“Judging by the size of the crowds at our events, the caliber and geographic scope of the attendees and the innovation that is driving the industry, there is no doubt in my mind that the commercial real estate tech sector is at a tipping point in its life cycle,” Michael Beckerman, CEO of CREtech, notes in the report.
The evidence is in the numbers. It was a bang-up year for the startup in CRE technology. Among the bevy of innovative and well-capitalized companies to launch in 2017 was Envelope, New York City’s only software-enabled zoning service. The software gives real estate professionals the instant ability to visualize development potential and enhance exploration with zoning experts. In the 18 months prior to year’s end, Envelope had raised $4 million from executives in the real estate business. 3D capturing firm GeoCV also came on the scene in 2017, endeavoring to ultimately provide everyone with the ability to capture the world in volumetric 3D and distribute the images on the Internet and in virtual reality. GeoCV, which holds the distinction of being the only software solution offering virtual tours via 3D-enabled smartphones, raised a $1.8 million seed round last year.
2017 also proved a positive period for seed stage investments, which went on the upswing with a year-over-year increase of 6 percent increase of total amount raised owing to volume and new technology applications. Total early stage funding grew as well; Angel, Seed and Series A funding rose 11 percent from 2016. However, it wasn’t all sunshine and rainbows in funding. Series B activity experienced a year-over-year drop of approximately 50 percent. Additionally, total early stage funding recorded a small decline, but a decline nonetheless, of 3 percent from 2016.
Money isn’t everything
There’s more to the story, however, than just money—or lack thereof. “Looking at funding alone does not paint the whole picture. Announced partnerships are increasing at an impressive clip and could be a sign of things to come as acquisitions and exits begin to unfold,” Anthony Dominguez, co-editor of the CREtech study, asserts in the report. Dominguez is well qualified to assess commercial real estate technology; he is CEO of AtlasX, acquisitions and dispositions software for the CRE industry.
The summary of findings in the 2016 CREtech report, he adds, “demonstrates how this rapidly evolving ecosystem is consistently re-inventing itself and challenging the status quo with the founding and application of new technology.”
Image via Creative Commons