Austin: The Next PropTech Hub
For the past decade, North America has been dominating headlines within the real estate technology (proptech) industry. Venture capital interest in proptech companies has seen a steady increase in the last few years, more so in North America than any other continent. This surge in interest is partly driven by the proliferation of companies that aim to transform the real estate landscape in the U.S.
New companies emerge at a high rate across the country, and offer innovative, tech-enabled solutions to address the long-standing industry challenges. In fact, it has become common for a new proptech company to have its roots in a city outside the traditional tech hubs of Silicon Valley and New York. As more proptech companies see high long-term potential in a specific market and focus on improving it, they collectively forge a technology hub in that market. Recently, as a positive side effect of this trend, new cities have begun to establish themselves as proptech hubs.
Among the cities that are coming forward as proptech hubs, Austin, Texas has been receiving the majority of the attention. Austin is known as a popular tourist location, with the great nightlife, restaurants and sight-seeing activities it offers. It is also frequently highlighted as a new attractive market for young talent, due to its relatively low cost of living and the high quality of life. Overall, Austin is ripe for innovation and growth, and there are a number of proptech startups are willing to pave the way. Lately, it’s real estate market is being revolutionized by companies that are set on addressing the specific needs of the city. The rising venture capital interest suggests that Austin’s new identity as a techhub will not be a temporary one.
Since 2018, a total of US$ 494.5 million has been invested in Austin-based proptech companies by 82 unique investors. 48 deals took place between 2018 and now, where a total of 35 proptech companies received funding. Of the 48 deals, 29 of them took place in 2018, with a total dollar volume of US$ 348.9 million. In 2019, a total of 19 deals took place, where the total dollar volume was US$ 145.6 million.
The ongoing increase in investor interest led to a number of large funding rounds in Austin. In fact, the top 5 largest capital raises represent 80.7% of all funding in the state of Texas. The largest proptech round so far took place on September 1, 2018. Bungalo, an Austin-based developer of a real estate platform intended to sell renovated homes, raised US$ 250 million in a Series A venture funding from Amherst Holdings. Bungalo’s platform allows users to review and buy freshly renovated homes, and acts as a one-stop shop where users can receive guidance throughout the buying process, including the financing they need to complete the purchase. On July 23, 2019, TurnKey Vacation Rentals, an Austin-based property management company that offers full-service premier vacation rental homes in top U.S. travel destinations, raised US$48 million in a Series E venture funding led by Altos Ventures. This round follows another round from the previous year, where TurnKey raised US$31 million on March 12, 2018 in a deal led by Adams Street Partners.
On March 19, 2019, Ojo, an Austin- based developer of a virtual real estate assistance platform that offers real estate suggestions and advice, raised US$ 45 million of venture funding from Royal Bank of Canada, Northwestern Mutual Future Ventures and Realogy Holdings Corporation. Ojo’s platform leverages AI to guide buyers and sellers through natural conversations and mobile messaging.
The diversification of company locations and capital has positively impacted proptech companies in Texas, especially companies in Austin. As big tech continues to invest heavily in “Silicon Hills,” proptech companies have benefited greatly. As CREtech researchers, the continued interest in funding proptech companies in Texas will only continue as more companies launch in the lone star state.
Check out the hottest proptech companies at CREtech Austin on April 22-23 at the Austin Convention Center. CBRE President and CEO Bob Sulentic and Chief Digital & Technology Officer Chandra Dhandapani will be delivering the opening keynote conversation on the first day of the conference. Please visit the CREtech Austin page to view the speaker list and learn more about the event.