Fintech and Proptech Convergence – Strengthening the Foundations of Real Estate Industry

The intersection of technology, financial services, and real estate creates a new and advanced class of products and services. A symbiotic nature is evident at this point and with the wave of automation and digitization, the entry points for becoming a part of the ecosystem are plenty. Finance is an integral part of the proptech industry – financial transactions are an integral part of almost all processes. What is the foundation of a successful real estate transaction? What other purpose do green buildings serve other than foster sustainability? The answer to every one of these questions revolves around saving money and conducting financial transactions.

Fintech payments and investments solutions are driving faster and more efficient sales processes. Add technologies like blockchain to this mix and the stakeholders are presented with unparalleled transparency. Encompassing a large B2B and B2C consumer base, fintech in proptech is driving revenues by making financial transactions of all scales easier. The industry is fed by a growing group of end users that are looking for easy and quick solutions for completing proptech transactions fulfilling a variety of needs – favorable credit scores, online mortgage solutions, automated payments, equity crowdfunding, and a host of e-commerce solutions. Again, the importance of data in all of it cannot be undermined.

The segment of investment and lending witnessed cumulative investments of $5.1 billion from 2005 to 2018. Out of all the 501 deals closed in this period, the funding amount for 424 of them were disclosed which caps at the amount mentioned above. In terms of the amount of investments, the year with the highest flow of funding was 2018 with $1.4 billion from the 80 disclosed deals that year. The total deals last year were 96, only the second highest after 2016 which had 100 deals and disclosed investments of $879 million.

Europe, North America, and Asia dominate the top spots with high investments. Higher concentration of proptech and fintech startups in these regions as compared to the others have ensured an impressive movement of money into the proptech segments. North American startups grew stronger over the years with a cumulative investment of $3.7 billion in the period from 2007 leading up to 2018. Funding in the investments and lending space crossed a billion dollars in each of the last two years in this period. Money into the investments and lending segment in proptech within Europe started flowing in 2009 onwards, helping the region gather $1 billion cumulatively by the end of 2018. Asia on the other hand, barely touched
$300 million, but still higher than other regions (Oceania, Africa, and South America) granting it a spot among the top regions.

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