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How Proptech Startups Plan to Spend Their VC Money in 2022 – Commercial Observer

How Proptech Startups Plan to Spend Their VC Money in 2022 – Commercial Observer
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Proptech startups entered 2022 with a variety of plans to publish the record $32 billion in venture capital They invested in the sector in 2021, with new hires, expansion into new markets, and optimizing their technology platforms high on the list. The plans come as the number of property owners and operators – both older and newer – increases. embracing technologyand the data they may provide to their property.

Ashkan Zande, Chairman of the Board of Directors Technology and Real Estate Innovation Center (Cretian). “These three areas are critical to the success of any proptech company.”

Proptech startups actively begin the hiring process an average of 32 days before the public announcement of the funding round, according to research by CRETI, which used data aggregated from LinkedIn and Glassdoor. Additionally, job advertisements by proptech companies have increased 7 percent since 2020, with 1,236 telecommuting/hybrid jobs posted in 2021 in the US.

FifthVenture capitalists invested $32 billion in proptech companies in 2021, a 28 percent increase in funding during 2020 and a 3.23 percent increase compared to 2019, before the pandemic, according to a recent CRETI report. The massive increase in proptech venture capital funding exceeded the previous all-time high of $31.6 billion in 2019.

One proptech startup that has seen a spike in venture capital investment in 2021 is a Manhattan-based company. UpflexChristophe Garnier, co-founder and CEO of the company, which provides what it describes as “Airbnb-type” flexible workspaces. Upflex, which launched in late 2017, raised a $4.5 million bridge tour in June 2021 from EIF . projects (Ecosystem Integrity Fund), a San Francisco-based venture capital (VC), and NewmarkGarnier said.

This funding, he said, was on top of the $4.1 million previously raised by Upflex in angel and founding investments, bringing the company’s total to $8.6 million.

“EIF Ventures invests predominantly in mission-driven companies that have a positive impact on the planet,” Garnier said. He said it has invested in Upflex because it allows people to avoid long commutes by providing a growing network of 5,500 flexible workplaces across the United States, reducing fossil fuel emissions.

Christophe Garnier. Photo: Upflex

Like Airbnb, Upflex is a “lightweight asset model” that does not carry leases, reducing its risk as an investment, Garnier said. “We’re a technology company, so we’ve been spending money primarily on product development and engineering.”

Additionally, using some of the money raised in 2021 for marketing through channel partners is Upflex’s direct route to market expansion, Garnier said.

“We are developing new features that allow us to double the distribution,” Garnier said. “At first, we were selling customers directly, but more and more we discovered that channel partners are like middlemen in Colliers InternationalNewmark JLL And Savills They became the heroes of our solution. They help us sell our solution to their customers, the Fortune 5000, which is our goal. We pursue clients of medium to institutional size.”

to DeskNow, a Dortmund, Germany-based proptech company that provides a digital platform for managing multiple workspaces, 2021 saw the 2020 startup raise $1.2 million in an initial round, CEO and Co-founder said Marius Garzina.

Of course, with financing come new challenges. “It is not an achievement except that the pressure is different now,” said Gerzina, who raised the funds from be10x Capital GmbH, a family office in Leipzig, Germany, as well as two angel investors.

Gerzina said he plans to distribute the money to “short-term marketing sales. That’s 85 percent of our spending plan for next year. And 15 percent for further product improvements.”

However, DeskNow must also distinguish how much should be spent on marketing versus sales, as the company, which already operates in Germany, Spain and the Netherlands, is looking to expand into New York City and elsewhere in the United States in the near future, Garzina said. .

“What we had to learn,” he said, “is that we spend on marketing a lot more than we have in our pocket.” “Essentially, are you going to hire people [for sales]? We will hire some people in sales in particular and the rest is spent on marketing.”

Hoping to build on investment momentum, Jaryzna is looking to raise a “nice big Series A round” in 2022, but emphasized that the next six months are all about “growing our sales. Now that’s the most important thing until we get a really great Series A funding” .

Another startup from proptech, based in Montreal local logic, a data and analytics platform for developers, was seeking end-of-2021 funding as of last week.

“We aim to raise about $15 million,” said Sarah Mafi, head of industry relations at LocalLogic, who added that the company’s executives hope to close the round by the end of the first quarter of 2022.

The current increase comes on the heels of the first round of Local Logic’s Series of 8 million Canadian dollars (6.1 million US dollars), which is the company Announced in November 2020. That round was he drives it Groundbreaking Ventures project, a Toronto-based venture capital firm focused on proptech, with participation from Shadow ProjectsAnd BDC CapitalAnd Jones Boys VenturesAnd capital cycle And Desjardins Capital.

SMaffey Headshot How Proptech Plans to Spend its Venture Capital Money in 2022
Sarah Maffey. Image: local logic

She said Local Logic’s plans to spend its funding are clear.

“I think the vast majority of the increase will be spent on building new products and expanding into new markets,” Maffei said. And the way we can do that is by hiring more people and acquiring more data sets. About 30 percent of our hiring will be in sales and marketing. About 60 percent will be in product development and engineering, and about 10 percent will be used to grow our general operations team.

“Our goal is not only to improve the products we already have, but to continue expanding what we offer, and to focus specifically on growing our customer base in the United States”

You get coveredIt is a commercial and residential headquarters in Manhattan Digital real estate insurance platformMuch of the $7 million it raised in Series A funding in 2021 is on people-backed technology, CEO Brandon Tubman said.

“Our goal is to grow our sales team for all of our distribution partners,” said Tubman, whose company already has 20 employees. “We’ve had a lot of momentum in the last six months and we’re going to double that. But most importantly, we’re investing a lot in technology. So we’re investing in OCR. [Optical Character Recognition] Recognizing AI, bringing more partners and tools to make our partners’ lives easier. “

Despite being a hugely tech startup, Get Covered still needs people to build its AI and end-to-end digital platform, which “will likely mean hiring 10 more people by the end of 2022, five of them starting this month.” , says Tubman.

“Our group is where we see the most growth in 2022 that makes our technology better and makes implementation easier, giving our sales people, and those we hire, the ability to sell faster and have more tools in their tool belt,” he said, adding that among 10 new employees he hopes to bring in in 2022, there will be three or four sales employees.

Now that 2022 has begun, Tubman said he sees the proptech investment pipeline continuing to flow. However, he said he’s balancing the pursuit of more funding rather than focusing on the company’s growth.

“A lot of companies have already contacted us [about additional funding], only based on all of our closed deals that have started to be executed, but we are not focusing on that right now,” he said. “We are focused on executing the trading opportunities that are available. But I suppose we’ll do Series B at the end of the summer or the end of the year.”

Philip Russo can be reached in prusso@commercialobserver.com.

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