It has been another extraordinary year in the real estate tech sector. There has been so much growth in virtually every aspect of the sector… new startups, big funding rounds, user growth, exciting new innovation, etc.
As someone who has been in the space virtually from the beginning, it’s really amazing to see how much has transpired in the past five years. From a handful of startups and a large number of puzzled faces (from the industry itself), to now seeing hundreds of millions of dollars being poured into startups from some of the biggest names and VC’s in the world and nearly a thousand startups. Simply, amazing!
So, where are we today and where are things heading in 2017? Here are my top five predictions for the New Year….
1) Consolidations/M&A. There is no doubt that we are at an inflection point in the sector. Some sites are taking off, others are struggling and many others are right in the middle and could go either way. In that regard, it’s a ripe time for mergers, acquisitions and consolidations. For sure, the stronger will capitalize on the weaker and those that see great synergy by combining their sites will merge.
2) It will be harder to raise money. I think that the tech world, in general, will experience some profound funding challenges in the year ahead. Whether it is due to the political or economic climate, my sense is that tech fundraising will be impacted (I think it already has been) and it will become more difficult to raise money for startups. All the more reason why growing revenue is the single most important strategy for a real estate startup.
3) A big new player will emerge from the outside. Who? I am not sure. Bloomberg? Google? Microsoft? The CRE tech world is getting good PR and it’s only a matter of time until some behemoth will realize that there is a huge opportunity to come in and really disrupt the industry.
4) More traction for sites. I do think that more and more professionals will turn to tech solutions to help their business. Two factors play into this. Their clients are getting more and more sophisticated and want to work with providers who embrace tech. And secondly, in a more challenging economic time professionals and companies turn to technology to become much more efficient in how they operate.
5) Global. If you see what’s happening around the world, many other markets are really starting to focus on CRE tech. Whether it’s Europe or Asia, there is a tremendous opportunity for U.S. based startups to expand globally. Just follow companies like VTS, Hightower,CompStak and others like them. It is where they are going and it’s no secret that they see big growth oversees.
Regardless if my own predictions come true or not, it’s going to be an exciting year for CRE tech in 2017 and I am thrilled to be a part of this dynamic, growing sector. One thing that is absolutely true is that tech isn’t going backwards or going away and it will become an even bigger force in our lives in the real estate industry. The only question is… how?
And that’s the best part of having a front row seat “court side” in this fast changing arena!