Will PropTech lead the next wave of technology adoption?

Endeavor Global has created a methodology to analyze the adoption and growth of technology. It is defined by the number of companies in an industry that achieve a private valuation of at least US$100 million within a decade of their founding. Worldwide and Latin America, the first wave of entrepreneurship was E-Commerce, followed by FinTech, and currently stands out SaaS.

PropTech presents numerous opportunities and, compared to industries like FinTech in their early stages, there are factors that make it a big industry with great potential:

• Market size and Opportunity: PropTech startups represented less than 3% of the market share, which shows a great opportunity for growth and untapped potential.
• Investment and Industry Support: More than 87 startups that have attracted over $1 billion in Venture Capital and Debt Funding as of 2023. However, these companies are still in their early stages.
• Changing Customer Expectations: One of the biggest advantages of PropTech, just like FinTech, is that they can easily adapt their services to seek comfort, transparency, and efficiency for consumers. PropTech can meet the demand for creating digital platforms to search for properties, manage real estate, crowdfunding, smart homes, and other solutions.

Overview of the PropTech Ecosystem in Mexico

Analysis of PropTech companies in Mexico revealed that there are 112 active companies operating in the country. Additionally, Endeavor conducted a survey of mapped companies, receiving a total of 76 responses. This represents 72% of PropTech startups in Mexico. The distribution of the sub-industries looks as follows:

The emerging industry that has the potential to lead the next wave of disruption is PropTech. However, it is in very early stages. 57% of the mapped startups were founded in the last five years.

And according to the survey respondents, the industry currently employs 3,434 individuals, and it is projected to sustain a 15% growth rate in 2023.

Venture Capital & Growth Equity

In 2021 the PropTech industry in Mexico received US$921M, making it the third-highest-funded industry in the country. In 2022, PropTech startups received US$414M, still ranking as the fourth most-funded industry after Fintech, E-Commerce and Transport and Logistics.

In Q1 2023, the investment for Latin America in VC (Venture Capital) was down by 88% because of an economic recession that has affected startups in all the world. Despite this reduction in investment, for 2022 and 2023 it is remarkable to be able to secure financing for an emerging industry.