PropTech Investment Finds Its Footing as Real Estate Digitizes

A cautious rebound in capital flows

In the PropTech sector, PropTech investment has edged into a steadier phase after the sharp correction that followed 2021’s peak. Global deal activity remains well below the highs of the zero-rate era, but mid-2024 data indicates modest quarter-on-quarter gains and improving confidence among founders and investors. Industry trackers show funding peaked above $30 billion in 2021 before retrenching by roughly half through 2023, with early signs of recovery this year, according to recent research. That stabilization reflects both a more disciplined venture market and real estate operators shifting from experimentation to deployment in areas with tangible payback.

Behind the headline numbers, the mix of capital is changing. Late-stage megadeals have thinned as investors seek clearer profitability paths, while seed and early growth rounds continue for startups tackling mission-critical pain points—leasing workflows, maintenance automation, tenant experience, and data infrastructure. Analysts note the deal count is skewing toward business-to-business platforms embedded in owner and operator processes, mirroring the broader enterprise software playbook, industry reports show.

Where investors are placing bets: AI, climate, and operations

AI-enabled underwriting, risk scoring, and asset management are among the hottest themes in the current cycle. Real estate owners are adopting tools that consolidate fragmented data, automate routine decisions, and boost efficiency across leasing, energy, and maintenance. A growing cohort of PropTech companies now pitch models trained on portfolio-specific datasets to reduce vacancies, forecast capex, and optimize rent strategies, with investors emphasizing near-term ROI and integration ease over purely novel tech.

Decarbonization is another magnet for capital. Buildings account for roughly a third of global final energy consumption and a sizable share of emissions, concentrating value in software that measures, manages, and monetizes energy performance. The business case is strengthened by regulations and tenant demand for greener spaces, with building analytics, retrofits orchestration, and grid-interactive systems drawing sustained interest, data from analysts shows. Dedicated funds and corporate strategics are backing startups that can cut energy use 10–30% through better controls, submetering, and predictive maintenance, often with pay-as-you-save models.