Proptech & Contech Index by AXC and RENT - Q1 2023

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Article Date
May 4, 2023

To follow the evolution and trends of the European Proptech & Contech ecosystem, Axeleo Capital and the RENT label publish the fourth edition of their "Proptech & Contech Index", covering the 1st quarter of 2023. It showcases a significant decrease in the total amount raised by European Proptech & Contech startups compared to 2022 standards, although the early stage ecosystem remains active with €500M+ raised. 

A significant decrease in funding compared to 2022 standards, but the early-stage ecosystem remains active

€500M were raised by European Proptech and Contech startups during Q1 2023. This represents a significant decrease compared with 2022 (the same period one year ago, Q1-22, showed more than €1Bn raised, while Q3 and Q4 2022 were respectively at €600M and €750M raised). In fact, the current level of activity has gone back to the level of 1.5 years ago (€525M raised over Q4 2021). That being said, the ecosystem is still showing signs of activity, starting with a growing number of rounds (+120 over Q1 2023 VS approx. 100 rounds during Q3 and Q4 2022). As expected, this remaining activity is still very much driven by lower-sized rounds and early-stage startups (pre-seed and seed) : on Q3, 80% of rounds are under €5M, whereas we see only 4 rounds > €20M. 

Proptech & Contech are still very much driven by Impact

Over Q1, a solid 29% of rounds are raised by startups with ESG as core business, in line with the levels of 2022 (32% on average for 2022) as green energy solutions for homes and buildings (BMS, smart thermostats, PVs…) represent the most funded line of business. The proportion of startups raising funds with at least one female founder also remains in line with 2022 (19% over Q1 2023 VS 18% on average in 2022).

As always : UK, GER, FRA VS the rest of Europe

The vast majority of investments is still captured by the deepest real estate markets : UK, France, Germany still gather most rounds (UK is still far ahead this quarter with 37 rounds) and +60% of investments. With Gropyus' €100M Series B in Austria, the DACH region captures +37% of all invested amount.

Construction technology and Home Energy Services on top of investor's lists

Home Energy Services (Smart thermostats, installation of PVs at scale, Energy Management...) and Contech (Offsite Integrated Construction, Procurement, HR Platforms, Productivity Tools…) are the most dynamic segments with the largest rounds (Gropyus, Tado, Aedifion, Hemea, Kewazo…) and the highest share of capital raised (38% of total amount raised by Construction Technologies - much higher than in 2022, and 33% for Property Management & Operations ie. "Manage & Operate"). The rise of these two verticals also explains the strong growth of Hardware technologies (Modular Construction, IoT & sensors, Innovative Materials, etc.) : from an average of 25% of investments captured in 2022, they take up more than 40% of investments in Q1-2023. 

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.

To view the previous editions of the " Proptech & Contech Index " by Axeleo Capital & RENT, please see 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 11th edition of this major European event for real estate professionals (visitors) and technology professionals (exhibitors) will be held in November at Paris Expo - Porte de Versailles. RENT is also exporting at a European level with a participation to RENT Switzerland and PROPTECH EXPO, in collaboration with SIMAPRO, in Madrid.