GCA becomes part of Houlihan Lokey


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Sector Report: Real Estate Technology Q3 2019

Contact: Chris Gough

Real estate technology continues to be one of the most active areas of financing and M&A activity through Q3 of 2019

  • The private U.S. real estate tech sector received nearly $1.9Bn of growth equity capital in Q3 2019 in addition to ~$140MM in debt for iBuyer and RE financing companies

Commercial real estate technology companies continued to drive significant activity in Q3, with several notable capital raises and acquisitions

  • Knotel raised $400M at a ~$1.0Bn valuation led by Wafra, signaling continued investment in the alternative workplace market ➔ important to note that the Knotel raise was completed prior to The We Company’s S-1 filing and subsequently delayed IPO
  • Strong M&A appetite among large strategics driving consolidation in the CRE marketL
    • In the construction tech market, Procore acquired two companies: Construction BI, which offers business intelligence solutions for the construction industry, as well as Honest Buildings, a leading project management platform for the CRE / construction market
    • On October 1st, CoStar announced the acquisition of STR, a leading hospitality data aggregator, for $450MM, representing a major push into the hotel market for the CRE data leader
    • The We Company also acquired two companies, Spacious and SpaceIQ, to bolster their space utilization analytics capabilities

Q3 2019 also saw major investments in the mortgage and insurance tech sub-verticals

  • Better Mortgage and Hippo insurance completed capital raises of $160MM and $100M respectively, signaling the growing influence of direct to consumer digitally driven offerings in the mortgage and insurance categories

GCA remains highly active in the PropTech market, having announced two transactions during Q3 2019: the sale of Inside Real Estate to Lovell Minnick Partners and the acquisition of Centralized Showing Service by ShowingTime

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