NEW YORK CITY—MetaProp NYC has created an index measuring the health of the real estate technology market from the perspective of active real estate technology investors and startup founders worldwide. The initial results of the Global Real Estate Tech Confidence Index were positive.
“We found that 90% of investors intend to make either the same amount of investments as last year or more in 2016,” reports MetaProp NYC co-founder and managing director Aaron Block. “Founders and investors expect that the real estate tech market will grow more competitive during 2016, with more startups chasing a larger pool of venture capital funding. We also see indications that the market is continuing to expand across asset types, with 40% of startups disrupting multiple asset types and about a third of investors expressing interest in technologies focused on multi-use, leisure, and others.”
For the survey, MetaProp NYC polled real estate tech investors and founders globally on their expectations for future market conditions as well as company growth. The research found that investors are significantly more confident about the real estate tech market (9.1 out of 10 confidence index) than entrepreneurs (5.4 out of 10 confidence index). Investor sentiment is driven by confidence in expected deal flow and expectation of more M&A activity, while founders are more concerned about the fundraising environment.
Investors and startups both expect the market to get significantly more competitive—except for finance & investment and consumer/broker tech. Most investors are looking to make bets in consumer/broker tech (space selection, leasing, payments); connected devices (Smarthome, Sensors, IoT) and space management and usage (property management, basement tech).
About half of investors expect to see more M&A activity in 2016 compared to 2015, while startups are generally pessimistic, with 44% reporting it is unlikely or very unlikely their company will be acquired, go public, or have a major liquidity event in the next two years. Investment interest and innovation in asset classes beyond commercial and residential is significant.
The survey was designed in collaboration with the Real Estate Board of New York. The index is based on responses to four sentiment questions about future market expectations. The 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. An index below five indicates that respondents are not confident in the market; more responded negative than positive to the survey questions. An index of five indicates that the positive and negative responses were equal.