Investment in UK PropTech reaches record levels in 2021

Investment in UK

There had been £1.6 billion of investment into the sector so far this year, a massive 360% rise from the £347.79 million seen in 2020, according to Pi Labs

Investment into the UK’s fast-growing PropTech sector has reached record levels in 2021 and more than quadrupled since last year, as the growing sector matures.

That’s according to PropTech-focused venture capital firm Pi Labs, which analysed UK PropTech funding round data for 2021 and discovered that there had been £1.6 billion of investment into the sector so far this year, a massive 360% rise from the £347.79 million seen in 2020.

The figure is also more than 15 times higher than the £105.68 million of UK PropTech investment achieved in 2016, showing evidence of the long-term trend that the sector continues to grow and attract investment capital.

The global landscape paints a similar picture, with over $20.57 billion (£15.52 billion) invested in PropTech so far this year, more than double the $9.37 billion (£7.07 billion) invested in 2020.

It is also nearly a three-fold increase from $7.06 billion (£5.33 billion) in 2016, as further confirmation of the long-term appetite for PropTech investment.

The research says the creation of a broad range of technology solutions which address common issues in the real estate world have helped to drive the surge in PropTech investment over the past 12 months.

There has also been an increase in PropTech mergers and acquisitions (M&A), with Pi Labs’ analysis of M&A data revealing that there have been 152 global PropTech acquisitions so far in 2021. This is up from 92 in 2020, and the most global PropTech M&A activity since records began.

PropTech investment is growing significantly year-on-year, as the real estate sector is increasingly aware of the operational performance gaps that have been unaddressed for a number of years, Pi Labs’ chief executive Faisal Butt said.

As the UK real estate sector wakes up to the changes required to reach net zero targets, landlords, investors and occupiers are realising that technological adoption will play a crucial role in future-proofing assets and meeting sustainability pledges, he said.

He added: On the back of the large wave of capital raised this year, and accelerated adoption within the sector, many PropTech companies are now achieving scale and we can expect later stage funding rounds and M&As to drive investment growth in 2022. Generalist VCs, particularly tech-focused Silicon Valley investors, are also now starting to get in on the action – especially from Series A. For example, Updata Partners led the £42 million LandTech Series A round last month.

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