It’s no surprise really that tech startups and the real estate sector have started to combine forces through a variety of emerging management platforms. The current market-place and expansive set of data regarding buildings is finally becoming available through digital platforms, and software developers and young CEOs are looking to streamline in demand processes using the tools currently at their disposal and those in development.
Over the past few years, the real estate and tech sectors have continued to generate even more synergy, and real estate is becoming increasingly dependent on technology throughout all aspects of operation in the industry. Recent estimates reveal that investors in New York’s real estate industry pledged $62 million to digital platforms concerned with residential or commercial real estate in the first half of 2015 alone.
By the Numbers: First Quarter 2015 Funding
According to a recent report published by tech advisory company RE:Tech, New York City based tech companies commanded $28 million in the first quarter of 2015. This capital went to seven companies, and by the conclusion of the second quarter, these NYC-based real estate tech companies had inked deals worth $34 million.
Howard Milstein, chairman and chief executive officer of Milstein Properties and Emigrant Bank explained the overwhelming investor support in these types of technology services and new platforms in a press release in June that announced his company’s funding of management platform, “Honest Buildings”. Milstein claimed;
“ With trillions of dollars spent on construction and building improvements annually, we see an untapped opportunity to realize significant savings and efficiencies by harnessing the power of data and information to enable better decision-making…”
Although many of the investments described in this report highlight large sums from individuals or companies, crowdfunding platforms that rely on smaller investments from a larger collective of investors have become a popular form of funding in recent years. Since January of 2015 the crowdfunding marketplace “Sharestates” raised a whopping $30 million in funding. In that same period of time, online investment platform Cadre raised an impressive 18.3 million.
Real Estate Tech: Global Growth
On a global scale, real estate-based tech companies are responsible for approximately $322.5 million in investments this year alone and most of those resources go to supporting commercial real estate enterprises. However, there is still approximately $100.7 million dollars that accounts for investments made towards residential real estate.
In addition to gathering estimates of how much money was invested in these real-estate tech companies, this report polled 500 real estate professionals- from both the residential and commercial areas of the industry and elicited their opinions regarding the role of technology in the industry.
Although the report didn’t necessarily speculate about how this market is poised to grow in coming years using exact numbers, one can imagine that the continued development of programs and platforms that cull and analyze data gathered by different companies is only going to become more and more popular. Finding ways to use and understand such a vast amount of data that can ultimately save these larger companies significant amounts of capital expenditure is more than enough reason to look at this as a true growth industry.