The Confederation of Real Estate Developers’ Associations of India (Credai) and startup incubator Venture Catalysts have partnered to set up a $100 million fund to invest in proptech startups.
The fund will invest in early to growth stage proptech startups leveraging data analytics, blockchain, artificial intelligence and augmented reality. Proptech startups working in segments such as residential, commercial, institutional (hotels, schools, hospitals) and industrial (warehouses and factories) will be backed by the vehicle.
Credai will provide startups with access to its network base of 13k+ members from different segments within real estate such as developers, vendors, channel partners, and promoters amongst others. The industry body will also offer mentorship support to portfolio startups.
“The real estate was one of the few sectors that witnessed the adoption of technology even before the pandemic hit. However, post-Covid era, this adoption has further increased to boost sales and experience, and hence there is a need for a dedicated fund that would help propel growth in the sector,” said Anuj Golecha, co-founder, Venture Catalysts.
“Through this fund, we expect to back interesting and innovative startups in the coming months. Besides, with recent unicorns such as Livspace and NoBroker, the proptech segment has received a massive sentiment from the VC community,” Golecha added.
In the past few years, Venture Catalysts has actively invested in companies in the real estate industry. The investor currently has a portfolio of over a dozen startups such as Oyo, Basic, Grexter, Sharenest, Home Capital and Rentomojo, among others.
The fund will support the ‘Make in India’ and ‘Techade’ initiatives of the Indian government to work towards the digitalisation of the country’s real estate sector which is estimated at around $300 billion.
The sector is expected to cross $1 trillion in value by 2030, according to a report by the Indian Brand Equity Foundation (IBEF). Indian proptech startups are expected to drive exponential growth with innovations in innovative design, logistical advancements, and artificial intelligence-based tech.
Golecha, however, pointed out that proptech in India has so far been limited to residential marketplaces such as MagicBricks, NoBroker, 99Acres, and Housing.com, among others. But technology is helping cater to all the important aspects of real estate right from searching for a residential property to helping technology plan large industrial spaces, he added.
Investments in the proptech firms are expected to cross $1 billion in 2025, 2x from the 2020 level, according to the 'Real Estate 3.0: Technology-led growth' report by CII and Colliers. In a bid to cash in on the opportunities, investors are making big bets on proptech startups in the country.
For instance, Housing.com’s founder Rahul Yadav-led proptech startup Broker Network raised Rs 90 crore from its existing and only backer Info Edge last week. Similarly, in July, Proptech platform Homexchange raised $4 million from HDFC Capital, Oberoi Realty and Anarock Group.
Other proptech startups which have raised funds in 2022 are Settlin, Gruhas, PropShare, BuildNext, Ivy Homes, HouseEazy, and PropReturns, among others.
Meanwhile, with the segment coming of age, startups are eyeing going public in near future. Square Yards and Oyo are two such companies that are likely to make their debut on public bourses in the coming months.