PropTech Market Map — November 2018
An overview of the Israeli startups tackling the world’s largest asset class
As a venture capital firm with deep ties to the real estate industry, we’ve been diving into the PropTech arena and exploring early stage startups that are bringing the largely offline industry into the digital age.
What is PropTech?
For those who aren’t familiar, PropTech is everything that touches real estate and construction. When thinking about the lifecycle of any property, residential or commercial, PropTech encompasses anything that intersects the planning, building, management, and even demolition stages.
It’s a huge category that is still largely offline. If you think about it in the grand scheme of things, you can manage your network, finances, travel, and even your job online. But to put the PropTech opportunity in context, it’s still largely uncommon for a renter to be able to pay their rent online or for a commercial real estate investor to get an on-demand mortgage quote.
PropTech in Israel
In the US, CBInsights does a great job at publishing data-driven research and market maps to help investors understand the market landscape. In Israel, we haven’t seen a great overview of the market landscape so we created one.
While researching PropTech startups for the market map (above), it seemed strange to me why there aren’t more Israeli startups tackling these industries? After all, if real estate is the largest asset class in the world, shouldn’t more Israeli startups be applying their savvy know-how to solve these archaic problems?
While historically we haven’t seen a lot of activity in this space in Israel, that’s changing. We’re seeing an explosion of PropTech startups in Israel tackling everything from reinventing the construction process to solving connectivity issues in apartment buildings.
Israeli founders can look to role models WeWork and Compass, who each have an Israeli founder and have become unicorns bridging the gap between technology and real estate. We are also seeing greater interest in the ecosystem with PropTech focused events like PropTech 360, which took place a few months ago in Jerusalem.
Also with growing interest from local developers to engage with startups, we’ll see an acceleration in the number of PropTech startups who can cross the chasm given a hopefully easier path to achieving product-market validation locally before attempting to scale abroad.
PropTech is booming
As CBInsights noted in their “The Rise of Real Estate Tech” webinar, VCs weren’t always interested in PropTech. In 2008, there was just $20M invested into real estate technology startups compared to a whopping ~$4B just a decade later in 2018.
The writing on the wall is clear: PropTech is only going to get bigger and more attractive. As more investment flows into the space, entrepreneurs will become more motivated to apply themselves to developing solutions for this market.
Looking towards the future
We believe that there is a ton of untapped potential in this space.
If you’re a founder that’s working on something cool that relates to our built environment and the future of how we shop, work and live, we want to chat with you!
Ground Up Ventures is an early-stage venture capital firm investing in pre-seed and seed stage startups in the United States and Israel. If you’re working on a solution for the PropTech industry, we would love to hear from you.
