Real estate technology accelerator MetaProp NYC has published the results of its Q4 2016 Global PropTech Confidence Index. A unique barometer of the health of the real estate tech market from the perspective of the most active PropTech investors and startup CEO/Founders around the world, the survey was completed with the support of Real Estate Board of New York (REBNY) and the Royal Institution of Chartered Surveyors (RICS). Among the findings, both investors and founders are solidly confident about the 2017 outlook, with 92% of venture capital firms planning to match or exceed the number of 2016 deals in 2017.
Overall, the Q4 2016 Investors’ Index was 8.2, up from 8.0 in Q2 2016, while the Q4 2016 Startups’ Index was 6.6, up from 5.4 in Q2 2016. The Confidence Index has a range of zero to 10. An Index above five indicates that respondents are confident in the market; more responded positive than negative to the survey questions.
Following the US presidential election, 1,500 PropTech investors and CEO/Founders were invited to participate in the Q4 2016 Confidence Index. Entering 2017, the respondents’ mood was decidedly upbeat.
“There is no doubt that there has been a massive exhale from all those in the PropTech industry who were holding their breath through the election season,” said MetaProp NYC Co-Founder and Managing Director Aaron Block. “With an 8.2 out of 10 investor Confidence Index and 6.6 out of 10 for startups, the survey’s results support what we have been hearing on the PropTech street — a far less negative atmosphere and greater market optimism from investors and startup CEOs now that the election drama is behind us.”
Block noted that recent events, including the merger of leasing management platforms Hightower and VTS, demonstrate a strong real estate tech trajectory. “Combined with the mega-merger of VTS and Hightower, the last two weeks have been unprecedented in the PropTech industry. If I were an incumbent real estate company, I’d be paying major attention. The unicorns might eat the dinosaurs!”
Here are some key Q4 2016 Confidence Index highlights:
92% of PropTech investors expect to match or exceed the number of investments in 2017 compared to 2016, demonstrating confidence in the growing PropTech sector.
57% of investors expect to see more M&A activity in 2017, as recently seen in the VTS-Hightower merger, which many consider the tip of the PropTech M&A iceberg.
63% of startups are forecasting at least 2X revenues or more for 2017, compared to their 2016 numbers, demonstrating strong sales growth optimism.
Here are some notable Q4 vs Q2 2016 variances:
In Q2, 33% of startups were targeting asset types outside of commercial and residential, while Q4 saw 43% showing greater tech disruption beyond those categories into leisure, multi-use and industrial.
In Q2, 44% of startup CEOs said they expected greater difficulty in raising venture capital, but that number dropped to 27% in Q4, demonstrating increased optimism.
In Q2, only 17% of startups were disrupting multiple asset types, but in Q4, the number shot up to 57%, broadening the real estate categories being effected.
The full report can be found here: http://www.metaprop.org/confidence-index