HomeAnalysisValley Bank Releases Report On Present and Future of Proptech

Valley Bank Releases Report On Present and Future of Proptech

Valley Bank (NASDAQ: VLY) released its third annual The Present and Future of Proptech report that examines the key macro factors shaping Proptech on the economic, demographic and market fronts as part of the backdrop to private investment trends.

The report, developed in collaboration with Pitchbook, Chris Green, Founder and CEO of GreenPoint Partners and Zak Schwarzman, General Partner, MetaProp, highlights that majority of 2023 industry-wide investment in Proptech – 70 percent – was in venture capital with 144 deals closed for a combined value of $2.9 billion, marking a meaningful decline from 2022 as the pace of deal making in Proptech was impacted by the general slowdown in most other asset classes.

The Key Points

  • 2023 saw an increase in the proportion of transactions around property management and transaction solutions, while aggregate deal values were also proportionally concentrated in those same Proptech segments. Physical property management, deployment of energy-saving devices and analytics packages also were prioritized.
  • Although primarily concentrated in VC, private investment remains key to accelerating Proptech innovation, while the activities of other investment firms or non traditional asset managers are a proof to the maturation of the sector.
  • Corporate venture arms and corporations themselves pulled back only in terms of the number of deals in which they participated – not the size of the deals themselves. They joined in 22 financings for a combined $2.1 billion in deal value.
  • The need to continually develop and implement tools such as AI in service of sustainability and efficiency still exists and will drive deal making – particularly on the VC side as firms balance caution with sufficient investment in Proptech’s gradual spread across multiple aspects of the property sector.
  • Regulations compelling greener construction will prompt a consistent level of funding for more radical innovations in materials and techniques, especially via digitalization.