Where VC Money is Flowing For CRE Startups

Despite a drop in funding, tech startups are still disrupting the market at a fast rate. Below is a great article highlighting the biggest disruptive startups in commercial real estate. Read on to see what segments of the market VC money is flowing to. 
 
Not totally surprising, the tech market is down from 2015. Though there was $25.5 Billion globally in VC funding in the first quarter of 2016, it was still a drop in funding from the previous year. This information comes from the KPMG and CB Insights’ Q1 2016 VC report, which highlights the latest trends in venture capital funding globally. (Click here to read the entire report.)  

 
Some reasons why funding is down:
  1. Investors want more information and protection.
  2. Early-stage companies need a stronger business plan now more than ever.
  3. Late-stage companies are shifting their focus towards sustainable operational improvements rather than growth.
There is now even a tech company that actually completes the entire real estate transaction…online. We believe you still need a broker to represent your interests. We are the best in class and would love to handle your renewal or relocation. Give me a call today. 
Craig
602.954.3762

Office Space: 53 Tech Startups Reshaping Commercial Real Estate

The commercial real estate tech market map spans emerging categories like data analytics, investment, and property-management software, among other categories.
May 10th 2016

In May 2016, leasing- and asset-management software startup VTS raised one of the largest financing rounds for a commercial real estate tech startup to-date, a $55M Series C financing led by Insight Venture Partners. The commercial real estate tech startup industry isn’t as large as the residential real estate tech scene just yet, but it’s certainly growing.

Using CB Insights and analytics, we identified 53 startups working in commercial real estate tech, and categorized them into a market map spanning key emerging categories such as analytics and crowdfunding platforms.

As noted in other real estate tech posts, our real estate technology category encompasses all the software tools and platforms used by different participants in the real estate industry, including brokers, investors, real estate-focused lenders, commercial property owners and managers (including multi-family buildings), as well as buyers. The category includes online real estate-rental and -buying guides, but excludes startups primarily focused on in-building services, e.g. office management.

Some startups span both the commercial and residential real estate markets.

Click here to enlarge map.

Listing & Search Services – This was the largest category in our market map, and includes startups that help users search for commercial real estate. This section includes 42Floors, which has raised from the likes of Bessemer Venture Partners and NEA, among others.

Marketplaces – This category helps match commercial real estate buyers with sellers, among other services, and includes startup VivaReal in the section. VivaReal focuses on Latin American markets, and has raised $61.7M to date.

Virtual Viewing – Startups that provide virtual property viewing, i.e. the opportunity to use cutting-edge tech such as 3D video to view properties remotely. Companies attacking this area include Matterport, which has raised over $58M to date. Some backers of theirs include Rothenberg Ventures, Greylock Partners, Felicis Ventures, and Qualcomm Ventures.

Tech-enabled Brokerage – One of the smaller categories in our map, startup here employ in-house brokers with their own listing services. This category includes TheSquareFoot, which raised $2.1M to date and counts RRE Ventures and Primary Venture Partners as backers.

Leasing-Management Software – Companies that provide tools to brokers and owners and streamline the leasing process, among other things. Companies in this space include the aforementioned VTS, which has raised over $85M to date.

Data, Valuation, and Analytics – This was one of the larger categories in our market map and includes Reonomy, which does commercial real estate analytics and has raised over $40M to date. The map also includes other well-known commercial real estate tech analytics startups like Compstak and Honest Buildings.

O-2-O Services – Companies here are primarily Asia-based online-2-offline (O-2-O) businesses where users complete their real estate transactions online. China-based Haozu.com is the only startup in this category and has raised $39M in financing to date.

Mortgage Tech – this was a large category in our residential real estate tech market map and we suspect more companies will emerge in the commercial real estate mortgage space in the coming months. The category includes peer-to-peer commercial mortgage lender Fruitful Finance as the sole company in the section.

Property/Building Management – These startups offer tools for property managers, landlords and tenants. Startups here include ClickNotices which helps landlords manage late rent payments and has raised $2M of disclosed funding from Super G Funding, Sopris Capital Associates, and Westlake Ventures.

Investment – One of the largest sections on our market map, the category includes crowdfunding platforms that allow investors to participate in debt or equity financing for commercial real estate, or both. Cadre, which has raised over $67M to date, connects investors to commercial real estate opportunities.

Property Information – Startups providing information and data-driven insights about commercial properties; Real Matters has raised over $127M from various investors, including Whitecap Venture Partners.

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