Tech Away Service

Kevin Sanderson/Pixabay

Technology has achieved a lot in the last few years - transforming information flow (Google), communication (Twitter, Apple), shopping (Flipkart), capital (UPI, Mobile Wallets), and transport (Ola, Uber). 

However, real estate is larger than all of those categories combined, meaning the revolution that real estate tech could bring to our lives is larger and more profound than our minds can currently gauge. 

Tech To The Rescue

Today, nearly 8,000 proptech firms around the world are facilitating everything - from how people buy, sell and market properties to innovations in building materials and methods.

But proptech's most significant impact today is in the way it has created new streams for revenue, resulting in a ‘secular expansion’ of liquidity as this JLL and MIT report describes it. 

Online transaction platforms have eased the fractional investment models with much lower thresholds for entry, resulting in an entire new population of individuals actively looking for ways to invest outside of the stock market. (Wait up, REITs are gaining ground in India.)

This inflow of cash is what saved the industry during the downturn, since it opened up a steady source of money that was too complicated to access earlier. Industry watchers feel that it is these millions aggregated from small amounts of money that brought proptech to centre stage. 

Is It An Easy Run Now?

Not really. Right now, proptech’s biggest hurdle to profitability is figuring out a path to scale their products and services to serve a large enough audience, without having to divert precious resources to constantly customise products for various local markets. 

The fact that there are 8000+ proptech startups only shows the endemic challenge of a diverse set of needs across the entire industry. 

The second big challenge is developing a common set of industry standards—a problem that shows up in every aspect of real estate. With the variety of unique products and offerings within the real estate sector, standardising processes is a constant headache for proptech companies. 

How Does The Future Look?

Here's a solid indicator. Mergers and acquisitions in the proptech space already scored a record high in 2020 with $21 billion in activity, and 2021 promises to top that with $18 billion of activity already recorded in the first half of the year. 

This means that perhaps, merging multiple proptech startups of reasonable sizes under one roof is a way to address the challenges that come with real estate's broad array of needs. 

Either way, proptech is having its day and we have our eyes peeled on this space.