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Proptech in real estate has experienced a surge over the past decade – the use of information technology has improved the ability of individuals and companies to research, buy, sell, and manage real estate across all asset classes. Within the retail sector, proptech has streamlined multiple processes for brokers, landlords, and tenants, improving businesses’ capacity to identify optimal retail spaces for their operations.

With a decade of innovation in the industry, real estate proptech has seen an immense amount of development, supported by funding from venture capital firms across the globe. In this article, we will dive into the growth of the proptech industry, identify how retail proptech has improved the sector, and highlight how proptech will adapt moving forward with changing consumer demands.

Innovation in the Industry

Funding for proptech has remained relatively high since its inception. A report released by the Center for Real Estate Technology and Innovation (CRETI) announced that venture capital-backed proptech companies raised $19.8 billion in 2022. While numerous companies have leveraged private interest, some have made headway in the industry, transforming operations and interactions for real estate professionals across the board.

Funding Billions: Opendoor and Compass

Two companies have made headlines for their massive funding efforts in recent years. Opendoor, an online company that buys and sells residential real estate, and Compass, a company that supports the entire buying and selling workflow, have both surpassed the billion-dollar benchmark in funding.

Launched in 2014, Opendoor has developed a program that can predict the price of a house by using technology to analyze the various factors that contribute to valuing a home. When a seller is interested, Opendoor values a home and creates a cash offer for the homeowner. Once a seller accepts the offer, Opendoor then purchases the home, completes renovations as needed, and resells the home.

Opendoor has raised nearly $2 billion since its inception. Starting off strong, the platform raised $9.95 million in 2014, $400 million in 2018, and $300 million in 2019, and has continued to obtain private funding to support its growth.

Booking.com

Trailing not far behind in funding is Compass, an advisory company that has funded $1.5 billion since 2012. Developed for tenants and realtors, Compass is a real estate technology company that provides an online platform for buying, renting, and selling real estate assets. Compass technology includes a marketing center designed to streamline functions for Compass agents, providing tenants with an improved experience.

Initial momentum in proptech has been in the residential sector, which most experts attribute to the sheer velocity this asset has seen compared to others. Commercial platforms, however, are emerging and altering the environment of commercial real estate.

Making Headway with Millions: Placer.ai and Reonomy

Placer.ai, an analytics platform founded in 2016, uses foot traffic data to generate insights into properties. Since its inception, the company has funded $192.5 million. Placer.ai is connected to roughly 30 million devices in the United States, tracking customers’ movement. The company uses machine learning to develop analytics based on the data that can help businesses understand a specific location. The technology is primarily used by tenants, brokers, and landlords.

 

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