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19/05/2023

Record number of mergers and acquisitions in the PropTech sector

Proptech

While the M&A market is taking a break, some sectors are still showing signs of dynamism. This is the case of the “PropTech” (Property Technology) sector, where company disposals and takeovers are on the rise. AURIS Finance, a consultancy firm specialising in mergers and acquisitions, offers you its analysis.

Between June 2021 and the end of May 2022, 73 M&A transactions involving PropTech companies were recorded worldwide. This figure is 38% higher than the previous year, according to the “PropTech Global Trends 2022” barometer prepared by the École supérieure de commerce de Paris and the Principality of Monaco. A year earlier, only 53 PropTech deals were recorded, while for the 2019 – 2020 financial year, the number of deals recorded was 37.

PropTech, a relatively new sector

A combination of the words “property” and “technology”, PropTech refers to any technological innovation aimed at the property sector. A few companies have recently emerged in France. The start-up Stonal, for example, has developed a SaaS platform that uses artificial intelligence to centralise all essential information on real estate. In April 2022, the company succeeded in raising €20 million. For its part, the French start-up Mansio has developed a digital service for the acquisition and management of second homes. Shortly after its launch, this PropTech managed to raise €2.5 million from BPI France and other investment funds.

A strong surge in investment

The sector has expanded significantly over the past decade. Virtually non-existent before the 2000s, the industry is now a very dynamic market. In the fiscal year 2021-2022, $20.41 billion was invested in PropTech companies, an increase of 17% compared to the previous year. This compares to $2.43 billion invested in PropTechs globally in 2013. In 2022, PropTech totals more than 2,000 companies whose technology is focused on four core businesses: construction, investment, management, and housing.

Who are the buyers of PropTechs? 

PropTech gems are mainly snapped up by real estate giants: consultancies, brokers, developers, and asset managers. The PropTech Global Trends 2022 report has compiled a list of the top acquirers. CoStar, the world’s leading commercial real estate information company, ranks first with seven acquisitions. In second place is Zillow, the leading real estate marketplace, which has made six acquisitions. Over the course of 2022, two new players entered the top 10 list of acquirers: consulting firm Jones Lang LaSalle and Fortive. Other non-property players stand out. This is the case of global private equity giant Black Rock, which has acquired six PropTechs.

Our experts at your side

Despite an unstable macroeconomic environment and low levels of funding, PropTech companies are successfully attracting investors. Acquisitions are on the rise. In addition to traditional buyers specialising in real estate, new buyers are emerging, such as private equity specialists. At a time of energy transition, the real estate sector is looking for innovative tools. Companies offering disruptive solutions continue to be particularly sought after. At AURIS Finance, our experts are specialised by sector. From the search for a new source of financing, or a new target company, to the final closing of the transaction, we are at your side.

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#AURIS Finance