The Present and Future of Proptech

Charting a Clearer Path in Murky Markets

Valley Bank (NASDAQ: VLY) released its third annual The Present and Future of Proptech report that examines the key macro factors shaping Proptech on the economic, demographic and market fronts as part of the backdrop to private investment trends. The report was developed in collaboration with Pitchbook, Chris Green, Founder and CEO of GreenPoint Partners and Zak Schwarzman, General Partner, MetaProp.

The majority of 2023 industry-wide investment in Proptech - 70 percent - was in venture capital with 144 deals closed for a combined value of $2.9 billion. This was a sharp decline from 2022 as the pace of deal making in Proptech was impacted by the general slowdown in most other asset classes.

“This decline can be attributed to a number of economic and geopolitical factors,” said Tom Iadanza, President, Valley Bank. “Rising costs of capital, overall economic unease and fears of geopolitical tension along with changes in supply chains’ speed and cost propelling revisions upward for construction and renovation created a cautious environment. However, Proptech investment activity continues to showcase pockets of resilience and represents a critical avenue for the gradual evolution of the global property sector.”

“The market correction has sharpened investors’ focus on companies that deliver proven ROI and are built on stable foundations - of which there are plenty,” said Zak Schwarzman, General Partner, MetaProp. “While Proptech fundraising volumes remain muted, it is clear from the front lines that deal activity began to meaningfully pick up in the latter half of 2023 as a back-log of higher quality companies reapproached the venture market with urgency to transact.”

“While both the real asset and venture capital sectors have faced headwinds in recent years, we believe technology will continue to play an increasingly critical role in shaping the future and advancing the long-term sustainability of the real estate ecosystem,” said Chris Green, Founder and CEO, GreenPoint Partners. “As dedicated investors targeting opportunities at the intersection of real assets, technology and sustainability, we remain incredibly optimistic about innovation, investment and growth across AI adoption, the energy transition and decarbonization-focused technologies. We’re thrilled to participate in this report and to showcase our long-term conviction in real assets technology alongside an exceptional group of industry leaders.”