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A sharp increase in private equity and strategic driven M&A reflects the growing influence of commercial real estate tech companies and the land grab that’s currently underway as acquirers look to build platforms in the space

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Sector Report: Real Estate Technology Q2 2019

Contact: Chris Gough

Real estate technology continues to be one of the most active areas of financing and M&A activity through the first half of 2019

  • The U.S. real estate tech sector received ~$3.0Bn of growth equity capital in 1H 2019 in addition to more than $1.4Bn in debt for iBuyer and RE financing companies
  • Investments continue to grow in size, with average equity financings over $21MM across 65 deals in Q2 2019, as competition for high-quality investments increases and the number of active strategics and private equity investors in the space continues to grow

Q2 2019 saw commercial real estate technology companies drive significant activity, with a flurry of capital raises and M&A transactions

  • VTS raised $90M at a ~$1.0Bn valuation led by Brookfield Ventures, the venture arm of Brookfield Asset Management, signaling strong demand from real estate investors / property managers for next-generation solutions to streamline their operations and improve margins
  • A sharp increase in private equity and strategic driven M&A reflects the growing influence of CRE tech companies and the landgrab that’s currently underway as acquirers look to build platforms in the space
    • Silver Lake and Battery Ventures backed LightBox announced two acquisitions in Q2 2019, Real Capital Markets and Digital Map Products, as they look to build an end-to-end software and data platform in the CRE space targeting commercial services firms, property owners, lenders and investors
    • Green Street Advisors and Real Capital Analytics (RCA) both partnered with PE firms in Q2 2019, with Green Street being acquired by WCAS and RCA receiving a significant minority investment from Susquehanna Growth Equity →we expect both of these firms to continue to be active in the partnership and M&A market as they look to accelerate growth

1H 2019 investments in residential real estate technology have been largely centered around iBuyer and purchase financing firms who have received significant growth equity and debt to expand into new markets

  • In the RRE software space, Vista-backed Lone Wolf Technologies acquired zipLogixin a highly strategic transaction that continues to consolidate the real estate transaction back-end and workflow market

 

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