Proptech & Contech Index by AXC and RENT - Q2 2023

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Article Date
August 29, 2023

Axeleo Capital and the RENT label are happy to publish the fifth edition of their "Proptech & Contech Index" covering the 2nd quarter of 2023. It confirms the decrease in the amount raised by European Proptech & Contech startups compared to 2022 standards, but nevertheless the early stage ecosystem remains active at the 2021 level with €441M+ raised.

Q2 2023 Proptech & Contech Index
Q2.2023 confirms the end of the 2022 euphoria, but the early-stage ecosystem is still very active

The time has come for the stabilization of the ecosystem towards a dynamic slightly lower than the one of 2021. In Q2 2023, there were thus 105 rounds (compared to +120 over Q1 2023, and 100 rounds during Q3 and Q4 2022) , still dominated by lower-sized rounds and early-stage startups just like in Q1 2023 (during Q3, 78% of rounds are under €5M). The euphoria of 2022 now seems to be definitely over. Indeed, the decrease of Q1 2023 is confirmed. €441M was raised in Q2 2023, a little less than the €500M in Q1 2023. These figures are far from 2022, where Q3 and Q4 2022 were respectively at €600M and €750M.

ESG, more than ever at the core business of Proptech and Contech startups

44% of startups in our study of Q2 2023 are impact driven, compared to only 29% in Q1 2023, and 32% on average for 2022. Entrepreneurs are increasingly sensitive to social and environmental issues. As such, Axeleo Capital has set up a periodic ESG assessment of the portfolio in order to support our startups so that they also achieve their objectives on these dimensions (pay equity, environmental impact, etc.). Besides, the proportion of startups raising funds with at least one female founder remains exactly at the same level as Q1 2023 and 2022 (18%).

An ecosystem still dominated by UK, GER and FR

The dominance of Europe's 3 largest markets is still significant with 68% of investments captured by GER, FRA & UK. This is even more the case since the number of fundraising events in Spain decreased (14 deals in Q1 2023 and 8 in Q2 2023), while it has remained the same in Germany and France with 14 and 12 operations respectively. The epicenter even tends to move north with the dynamism of Sweden, which records 7 tricks (3 in Q1 2023). It is interesting to note that UK recorded a 20% drop in the number of operations (from 37 to 29).

Back to basics for investors with the return to favor of Digital Tools for Construction and Property Management

While Construction technology and Home Energy Services were on the top of investor's lists in Q1 2023, more classic topics garnered the most investment (20% of the total alone for Q2 2023). It is thus the Manage & Operate vertical that wins the bet with 48% of investments, way ahead other verticals (25% for Design & Build, 10% for Live & Work). The Q1 2023 Hardware trend slightly slowed down but remains significant in Q2 with 30% of investments.

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, Beanstock, Pionix, Oculai, Graneet...

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.