- Venture capital has invested $24.6 billion into built-world tech in 2019 up through the third quarter, according to a new report by EY and CREtech.
- The report predicted 2020 would be the year when category winners begin to be solidified in real-estate tech, and that the number of funding rounds and the sizes of deals would continue to increase.
- The two largest categories tracked in the report, real estate and finance and flexible space, raised more than $20 billion each over the period.
- Real estate and finance is a broad category that includes Airbnb’s hospitality platform, along with Opendoor and Compass, while flexible space is a tighter group that includes WeWork and its competitors, as well as coliving startups.
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It has been a banner year so far for the real-estate-tech world.
A new report from EY and CREtech pegged venture-capital investments in so-called built-world tech at $24.6 billion through the third quarter, the most since 2015, which was the first year analyzed by the report.
From 2015, a total of $75.2 billion has been invested in tech to purchase, manage, operate, invest in, or maintain residential or commercial real estate.
The report also predicted 2020 would be the year when category winners begin to be solidified in real-estate tech, and that both the number of funding rounds and the size of deals would continue to increase. It separated investments into eight categories and found that the top five categories made up 93% of the funding since 2015.
“The astounding flow of capital into built-world tech show that this is the market on the cusp of breaking out,” Mark Grinis, EY’s hospitality and construction leader in global real estate, told Business Insider in an email. “While there are hurdles to overcome, we are still in the early stages of built-world tech development.”
The two largest categories, real estate and finance and flexible space, raised $27.88 and $22.76 billion, respectively. Real estate and finance encompasses a wide variety of companies, from Airbnb’s hospitality platform to the iBuyer Opendoor and the real-estate brokerage Compass, while flexible space is a tighter group that includes WeWork, its competitors, and coliving startups.
While real-estate and finance startups raised the most capital, they also saw seven times as many transactions as flexible-space businesses.
The top five companies in both spaces received about 40% of the total capital. This suggests that both categories have produced some early winners but that the real-estate and finance segment may be more likely to spawn some lesser-known leaders. Some of this could likely be explained by the definition of the category, which includes hybrids of proptech and fintech and actual brokerages.
Management, the third most invested-in area, is highly fragmented, with only 8% of investment going to the top five operators. The category is defined as anything that automates certain workflows, and it includes the Airbnb partner Niido and the commercial-real-estate client-relationship-management company VTS. “Internet of things” and smart buildings, construction tech, and data analytics round out the fourth, fifth, and six most invested-in categories on the list.
Visualization and tenant-experience startups have raised only $1.27 billion in total funding since 2015. The report predicted that visualization companies that use 3D modeling or drone mapping for marketing or design would be a space to watch. The amount of capital raised by these companies may be low, but median valuation is high.
The report also watched artificial intelligence and machine learning, an underlying category that is an essential part of the other categories. The buzz for computer-automated solutions is as strong in real estate as it is everywhere else. Since the end of last year, AI and machine-learning companies have seen a more than 200% increase in the dollar amounts invested.
A new pitch deck from IAC’s Dotdash shows how it plans to grow its media business after the Match spinoff
BI Prime Michael Seto/Business Insider This story requires our BI Prime membership. To read the full article, simply click here to claim your deal and get access to all exclusive Business Insider PRIME content. Barry Diller’s IAC is spinning off its dating sites business Match, which will leave media properties as a bigger part of…
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- Barry Diller’s IAC is spinning off its dating sites business Match, which will leave media properties as a bigger part of the remaining company.
- Those include College Humor and Dotdash, a collection of 11 service-oriented sites like Verywell, The Balance, and Lifewire.
- At a December 4 presentation to investors, Dotdash laid out its business case.
- Dotdash has been on an acquisition spree lately.
- Dotdash said it’s one of the fastest growing publishers online, with healthy profit margins, and is giving established brands a run for their money in certain categories, and diversifying beyond advertising.
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Barry Diller’s IAC is spinning off its dating sites business Match, which will leave media properties as a bigger part of the remaining company.
Those include College Humor and Dotdash, a collection of 11 service-oriented sites like Verywell, The Balance, and Lifewire.
At a December 4 presentation to investors, Dotdash CEO Neil Vogel laid out the business case for his company, which has been on an acquisition spree lately, buying niche sites including Brides and Liquor.com.
Dotdash said it’s one of the fastest growing publishers online, with healthy profit margins, and is giving established brands a run for their money in certain categories like health, finance, and home.
It’s laid the groundwork to expand into the lucrative beauty advertising category and take on Condé Nast and Hearst, with the acquisitions of Byrdie, Brides, and MyDomaine.
The bulk of its revenue comes from advertising, but commerce is a growing part of the mix, accounting for about one fourth of revenue.
Scroll down to see how Dotdash is positioning itself to advertisers and investors:
While other digital publishers consolidate, Dotdash says it’s growing rapidly, profitably.
Dotdash’s sweet spot is news and information people need.
Its brands span categories that are advertiser-friendly: health, finance, beauty, and lifestyle.
Dotdash focuses on service and information that people search for on Google.
This graph shows how Dotdash says it’s challenging established brands in categories like health, finance, and food.
Dotdash’s content strategy relies on 125 editorial staffers and more than 1,500 freelancers who update articles as often as weekly.
Dotdash sites have a stripped-down look with minimal ads.
Dotdash’s sites have grown their audience dramatically since it relaunched or acquired them.
Dotdash says advertising is growing at an annual CAGR of 19%.
Dotdash is diversifying its revenue mix, with commerce becoming about one fourth of revenue.
Dotdash calls itself an attractive platform for advertisers with the ability to add new revenue streams.