Jan 20, 2025

The Proptech sector saw a strong comeback in 2024, with funding rising to $416.49 million after years of decline. Leading startups like Oyo, HomeLane, and Rentomojo spearheaded the fundraising spree. New Update The proptech sector saw a strong comeback in 2024, with funding rising to $416.49 million after years of decline. Leading startups like Oyo, HomeLane, and Rentomojo spearheaded the fundraising spree. Established players such as Oyo, WeWork India, and Livspace dominated in revenues. Both domestic and international investors, including AC Ventures, Accel, and Blume Ventures, played a key role in supporting innovation in the sector. This report by TheKredible , provides a detailed analysis of these trends, offering insights into the growth trajectory and potential of proptech. Year-on-year funding trends The Proptech sector has undergone notable shifts in funding patterns in recent years reflecting broader market dynamics and investor sentiment. In 2021, the sector attracted a substantial $1.31 billion. However, funding sharply declined in 2022 to $632.5 million, and continued to drop in 2023, reaching a low of $122.81 million. By 2024, the sector began to recover as the venture fund inflow surged to $416.49 million. Leading fundraisers of 2024 Among leading fundraisers during 2024, Oyo, a leader in the hospitality sector, topped the charts with $175 million in funding. Home interiors and renovations platform HomeLane raised $27 million followed by furniture rental brand Rentomojo with $25 million, and real estate consultancy firm Anarock with $24 million. Amber, focused on global student housing, raised $21 million, Smartworks, a co-working space provider, secured $20.24 million to further its footprint, and turnkey solutions for pre-engineered buildings EPACK raised $20 million. Meanwhile, managed accommodation provider Stanza Living, real estate firm Guardians, and co-working solution provider Incuspaze raised $13.21 million, $12 million, and $8 million, respectively, rounding out the list of top 10 fundraisers for the year. Financial performance of leading proptech companies in FY24 In FY24, Oyo led the pack with an operational revenue of Rs 5,388.79 crore followed by WeWork India, Livspace, and Smartworks generating revenues of Rs 1,665.14 crore, Rs 1,185.73 crore, and Rs 1,039.3 crore, respectively. Square Yards, Awfis, IndiQube, SILA, HomeLane, and Simpliwork also made it to the top 10 revenue-generating firms. Profitability was also a key highlight, with several startups achieving significant profits. Oyo stood out with a profit of Rs 229.58 crore, however, this was majorly due to the Rs 453 crore income from exceptional items (mostly a fair value gain of Rs 240 crore on the acquisition of OYO Hotels Cayman and Reversal of financial liability of Rs 249 crore). Isprava, a real estate solutions provider, reported profits of Rs 62.71 crore, while Anarock followed with Rs 44.94 crore. Decor and interiors platform Livspace is on top in terms of losses with Rs 413.82 crore loss followed by IndiQube, Housing.com, and WeWork India. However, with economies of scale and cost-cutting measures, these firms are trimming their losses year-on-year. Leading investors in proptech startups The year 2024 witnessed significant investments from both domestic and international venture capital firms, reaffirming the growing interest in proptech solutions. Prominent investors such as Z47 (Matrix Partners), Accel, Inflection Point Ventures (IPV), Blume Ventures, Capria Ventures, Chiratae Ventures, and Gruhas played pivotal roles in supporting the sector. AC Ventures, Singularity Ventures, Stellaris Venture Partners, and Peak XV’s Surge Ventures also actively contributed to funding a diverse range of tech companies, including Accacia, Stanza Living, HouseEazy, Wify, Rentomojo, Settl, Furnishka, Flaer, Nestasia, ELIVAAS, Aeria, Trampoline, The Quorum Club, Homversity, Jugyah, Truva, and Vaaree. Consolidations in the proptech The proptech sector witnessed only three merger or acquisition deals in 2024. In a mega deal, Oyo acquired G6 Hospitality, the operator of Motel 6 and Studio 6 for $525 million. Oyo also purchased Paris-based premium rental homes company Checkmyguest in another deal for $27.4 million. Additionally, omnichannel home interior and renovation platform HomeLane announced its offer to acquire DesignCafe, a leading player in the home interior market. Get the complete report here . Race to IPOs Awfis recently became the first Indian co-working startup to go public, marking a milestone for the industry. Smartworks has also taken a crucial step forward by securing SEBI approval for its proposed IPO. Media reports suggest that several other proptech companies, including WeWork India, Simpliwork, Table Space, DevX, and Indiqube, are gearing up for public offerings while Oyo and Pepperfry are waiting for favorable market conditions. Looking ahead, the co-working sector is anticipated to lead the IPO landscape within the Indian startup ecosystem. Conclusion An easy to understand business model, with predictability to boot is what works for proptech in general. What has been tripping up the sector has been the issue of high costs on different models, which hasn’t always gone to plan for the firms involved. Maintaining quality, logistics costs (for product firms, especially furniture firms), and rental costs (for co-working firms) remain huge factors impacting profitability. But the sheer size of the sector means startups will never quite give up on the many opportunities in the sector, especially with the pace of formalization continuing apace. One could argue that the journey has just started, and the sector has a truly long way to go and evolve with the market.