Axeleo Capital & RENT launch new European Proptech & Contech Index

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Article Date
May 4, 2022
To follow the evolution and trends of the European Proptech and Contech startup ecosystem, Axeleo Capital and the RENT label publish the first edition of their Proptech & Contech Index, covering the 1st quarter of 2022. With 5 times more funds raised by startups than a year ago - €880 million vs. €173 million - the index shows the dynamism of a European Proptech and Contech ecosystem still in full expansion.

A strong growth in the average size of publicly disclosed financing rounds

Over the first three months of 2022, European Proptech and Contech startups have raised a total of €880 million. That' s 5 times more than on the same period a year ago, and it already accounts for 50% of the overall amount raised in 2021 (€1.6 billion). What really has changed is not the number of fundraising events - we have recorded 108 rounds in Q1 2022, versus 101 in Q4 2021 - but rather the size of these rounds: in 2021, a Proptech/Contech start-up announced an average €4.6 million raised, compared to more than €8 million for Q1 2022. 

This shows that this very early-stage ecosystem is gradually becoming more structured, with both the entry of new investors capable of deploying at all stages of maturity - from Seed to Growth rounds - and the maturation of the first scale-ups which can crystallize significant follow-on rounds (there were 5 rounds of more than €50 million and 15 rounds of between €20 and €50 million in Q1 2022, versus 9 and 20 respectively over the whole 2021).

The rise of Contech

Even within the specific verticals of real estate and construction, some topics attract more investors than others. The index confirms the rise of Contech (the "Design & Build" category - which includes site management tools, low-carbon concrete, modular construction, etc.) during Q1, with 31% of all financing rounds, compared to an average 24% last year.

Alongside market segments that are already well known to investors, such as property management software (9 rounds in Q1 2022, including, for example, Homeland's Series A in France or RoomMate's Seed in Luxembourg), we are also witnessing the rise of new, very dynamic verticals such as smart home solutions (11 rounds, including Swedish company Minut's Series B) or procurement tools for construction sites (8 rounds, including German contech Cosuno's $30 million Series B).

Impact-oriented startups are gaining momentum

Another good news is that the share of fundraising by startups considered "impact" (i.e., with a value proposition focused on sustainability or inequality reduction), has also increased significantly. It amounts to 30% in the first quarter, compared to an average 18% in 2021. The best example is given by Deepki - a French start-up previously accelerated by Axeleo - which raised the largest round of the quarter with a €150 million Series C, aimed at scaling its data tracking tool for buildings' carbon emissions. However, the share of startups founded by women that have raised funds during the quarter remains very low (13% of the funds raised), and slightly lower than in 2021 (16%).

In which countries are these investments going?

In terms of the geographic distribution of the funds raised, activity remains concentrated in the deepest real estate markets, which coincide with the most dynamic European economies. The UK, Germany and France alone gathered more than half of the rounds raised in Q1 (65 out of a total of 108) and attracted 66% of the capital. Outside of these leading markets, Spain (10 deals) and the northern countries (14 deals in total for Norway, Sweden and Finland) also stand out for their strong activity.

Software technologies favored by investors

Finally, in terms of technologies, the Index shows that investors are focusing more on software models, which are easier to scale than hardware solutions. SaaS (Software-As-A-Service, 25 rounds - 16% of investments) or Marketplace (27 rounds - 19% of investments) solutions have raised the most capital, while startups relying on hardware technologies (new materials, new construction processes, internet of things...), only collect 33% of total investments.

These impressive figures illustrate the strong growth of a Proptech & Contech ecosystem which is still fragmented in Europe, especially compared to the United States, but which is gradually beginning to build up. In the coming months, it will be interesting to see how the global and European economic situation (return of inflation, war in Ukraine, etc.) will have an impact on the amounts raised, given that a contraction is already being felt in the most mature market segments since the beginning of the year.

Methodology: The Proptech & Contech Index is based on data from Axeleo Capital's analysis as well as databases, Dealroom and Crunchbase in particular. These data sources mainly gather information on deals and rounds that have been publicly disclosed - many other raises are taking place, but without announcements or communications on amounts (thus difficult to track). The analysis is limited to companies with fewer than 250 employees, founded after 2010, headquartered in Europe, and with a value proposition focused on real estate and construction sectors. We also refer to venture capital fundraising only (i.e., excluding debt, grants, and non-equity financing).

For more information on the Proptech & Contech Index, click here.

About Axeleo Proptech I:
Axeleo Proptech I is a €40M early-stage VC fund dedicated to proptech and contech startups across Europe. Axeleo Capital is a venture capital firm active in the European early stage tech scene and supported by a large pool of entrepreneur-investors. Axeleo Capital offers startup founders a unique support framework that combines equity investment, operational and strategic coaching and an active ecosystem of more than 100 high-level partners and mentors. Its Proptech investments include GarantMe, Check&Visit, Prello, Beanstock, Laiout, Bright Spaces...

About RENT:
Created in 2013, RENT (Real Estate & New Technologies) is the must-attend event for innovation at the heart of real estate. The 10th edition of this major European event for real estate professionals (visitors) and technology professionals (exhibitors) will be held on November 8 and 9, 2022 at Paris Expo - Porte de Versailles. RENT is also exporting at a European level with a participation in the 3rd edition of RENT Switzerland on April 6 and 7, 2022 and the organization of the 1st edition of PROPTECH EXPO, in collaboration with SIMAPRO, on May 26 and 27, 2022 in Madrid.