Credai launches $ 100 mn fund to back proptech startups- how will it benefit real estate industry?
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Credai launches $ 100 mn fund to back proptech startups- how will it benefit real estate industry?

By Raghav Gupta

Last updated - Sep 20th, 2022

Table of content
  • Big Boost For Real Estate Segment
  • The Rising Proptech Industry
  • How will PropTech benefit the real estate sector in India?
  • Proptech a future opportunity for real estate

The Confederation of Real Estate Developers’ Associations of India (Credai) and Venture Catalysts have jointly launched a new fund worth $100 million to back startups innovating in the property segment.

Credai is an apex body for Indian real estate developers, with a mission to promote housing and real estate projects. The industry body also works towards disseminating information about the real estate sector.

On the other hand, Venture Catalysts is a startup incubator that has actively invested in proptech startups. Proptech startups in its portfolio are Oyo, Basic, Greater, Sharenest, Home Capital, and Rentomojo, among others.

Big Boost For Real Estate Segment

With the fund, early to the growth stage Proptech startups can get equity financing to expand their operations. Startups using data analytics, blockchain, artificial intelligence, and augmented reality to solve real-world problems of the industry will receive moolah from the fund.

The founding partners – Credai and Venture Catalysts – will look to back companies working closely with residential, commercial, and institutional such as hotels, schools, and hospitals as well as industries like warehouses and factories.

Besides the funding, the selected proptech startups will also receive mentorship and networking support. The industry body will provide startups with a platform to connect with its more than 13,000 members. Industry leaders, developers, vendors, channel partners, and promoters, among others, will guide the founders of the fund’s portfolio startups.

The fund will also promote the Indian government's "Make in India" and "Techade" programs as the government attempts to digitise the $300 billion-plus real estate market.

Overall, the fund will provide an immense opportunity to the startups in the proptech segment, and in the long run, it could introduce innovations in the real estate industry, fueling the exponential growth of the segment.

The Rising Proptech Industry

In India, the proptech segment is witnessing sharp growth. For instance, investments in proptech enterprises are predicted to reach $1 billion in 2025, a 2x increase from the level in 2020, a report titled 'Real Estate 3.0: Technology-led growth' noted. The report by CII and Colliers also pointed out that investors are investing in the proptech startups in India to make the most of the opportunities lying in front of them.

Even globally, the proptech segment is booming, having received more than $24.3 billion in investments in just 2021, according to Statista. The current financial year is also witnessing a slew of deals happening in the segment, and the future looks promising.

This has been led by the post-pandemic period, where technology gave an impetus to the growth of the real estate sector. This has additionally ensured seamless remote working, ease in construction, and focus on health followed by transparency in transactions. Though lOT, AI, and VR were used since pre-pandemic, these systems have gained momentum in the past 2 years. So far, PropTech India is largely focused on residential and commercial markets. Still, technology has infiltrated every aspect of real estate, from planning and design to construction techniques to building facilities and property management. As a result, Proptech startups have attracted more investment.

How will PropTech benefit the real estate sector in India?

Despite the emerging digitization in real estate sector in India, there is not much awareness on how convenient PropTech can be. Eradicating fraudsters, complete authority over documentation and transperancy are a few of the crucial aspects of technology in real estate. Also, lesser frauds and more education on legal terms are a big advantage of proptech. Blockchain can help people to be authoritative of their own information rather than being dependent on a third party and related firms. Plus fintech in real estate can help commoners invest better, transact better and choose better too! It is high time that people adapt to the consecutive changes that are done for the best in technology and also use the facilities wisely. We can’t ignore the fact that online frauds do happen apart from the feasibility technology provides! So being realistic in terms of using a technology is must especially while investing in real estate.

Proptech a future opportunity for real estate -

Whilst it’s certainly true that financial investment is an important factor in accelerating the growth of PropTech companies, it’s often not the number one priority for startups. PropTech companies all want opportunities to integrate their solutions into real-world environments, as well as deeper collaboration and dialogue with industry experts. PropTech startups need to be supported with expert advice, collaboration, and testing opportunities, as well as financial backing, if we are serious about transforming the industry and its products and services for the better.

If you are someone looking for a data-centric platform utilising technology at its full potential to manage real estate invetsments, here we are! Let’s get you through different investment opportunities we have. Safe, transparent and speedy real estate investing on the go! Head to our investments page to discover more!

Author avatar
Raghav GuptaInvestment Associate

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