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A record 103 property tech companies raised financing in the quarter – including 21 capital raises of $20M or more

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Sector Report: Real Estate Technology Q1 2019

Contact: Chris Gough

 

Executive Summary

Q1 2019 represents yet another quarter of record capital inflow and investment into the real estate tech market

  •  ~1.7Bn of growth equity capital invested in the sector in Q1, and nearly another ~$1Bn in debt for the iBuyer and property investment firms
  • A record 103 property tech companies raised financing in the quarter – including 21 capital raises of $20M or more

Transformative M&A announcements in mortgage, portal and brokerage markets reflect continued strong strategic and PE interest in the property tech market

  • Thoma Bravo’s $3.4Bn acquisition of Ellie Mae is a landscape defining transaction in the mortgage tech market → signals continued PE interest in enterprise software leaders and the property tech market
    • Ellie Mae is a platform play for Thoma Bravo, and GCA expects continued M&A activity in the highly fragmented mortgage tech market driven by strategics and PE-backed platforms such as Optimal Blue (GTCR) and Capsilon (Francisco Partners)
    • JLL acquired HFF in a ~$2.1Bn deal that signals the continued importance of economies of scale for the commercial services industry → commercial real
      estate tech investment is also gaining momentum with a number of companies raising capital in the past 12 months (e.g. Bowery, Honest Buildings, VTS, Reonomy and others)

The iBuyer market continues to be a key driver of activity in the residential real estate market, with Zillow bringing back Rich Barton as CEO in a move to aggressively expand its iBuyer program Opendoor, Knock and Offerpad completed significant capital / debt raises in Q1 2019

  • Zillow’s push into the iBuyer market adds a significant, well capitalized competitor into an already crowded space, with other real estate giants such as Keller Williams rumored to be entering the space as well

GCA remains highly active in the category, having advised ATTOM Data on its sale to Lovell Minnick in Q1 and zipLogix on its sale to Lone Wolf Technologies in April 2019 (case studies in the full report)

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