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Executive Summary

2018 was another record year for M&A and financing volume in PropTech → expanded category participation from a broader set of strategics and financials as
the importance of tech adoption increases throughout the real estate acquisition / funding / management / optimization cycle

• Three companies, Opendoor, Compass and Katerra, raised nearly 37% of the total funding in the category in 2018 → all three companies are SoftBank backed and their funding is representative of a broader market trend of increasing funding round sizes to category leaders
• Overall venture / growth equity funding in the sector up 84% y/y in 2018
• Major public company RE names were very active with key M&A deals in 2018 → Zillow / Move.com / Fidelity National Financial / LendingTree and many others announced strategic acquisitions in 2018
• Overall M&A activity in the category up 82% y/y in 2018 (based on deal count)
• Multiple active private equity firms who see vertical roll-up opportunities in segments of the RE Tech market (e.g. EDR, MRI, ATTOM Data)

GCA expects that the PropTech market will remain highly active in 2019 for both capital raise and M&A transactions:

• Interest rate environment and its impact on RE transaction volume remains a core focus for buyers / investors
  • Increasingly, mortgage tech & underwriting companies looking to connect closer to the RE transaction in order to capture purchase dollar volume
• 2018 was the year of the “iBuyer” as multiple companies entered into or significantly expanded their iBuyer programs (including Zillow) → expect significant
• iBuyer expansion to continue in 2019 as data proliferation enables consumers to better compare sale / timing options
• Commercial / multi-family tech companies continue to be one of the most active sub-sectors of the market → MRI and Accruent executing significant
  market “roll-up” strategies while CRE Tech is increasingly attracting capital inflows from the strategic / financial universe
• Several large construction tech deals in 2018 (e.g., PlanGrid and Viewpoint) signals potential for construction tech / data as another large and important
  market category in RE Tech