PropTech trend has reached investors
In addition to the technological solution itself and the demand for it from established companies, a successful startup also needs the appropriate financiers and investors. In the various stages of development, PropTech companies need to maintain a balance in this “triumvirate” and ensure sustainable liquidity.
A lot of capital is currently flowing into startups. In 2020, over CHF 2 billion flowed into Swiss start-ups. Across Europe, more than 500 million euros per year have recently been invested in startups dedicated to digitizing the real estate industry (source: Swiss Venture Capital Report 2021, European PropTech Trends 2020). In addition to professional venture capital companies, it is increasingly corporate investors and business angels who want to cut a piece of the (PropTech) pie here. This is due, on the one hand, to the situation on the financial markets – keyword negative interest rates – but on the other hand it is certainly also due to the digital transformation and the efforts of companies to secure appropriate product know-how in the company.
But how does a startup actually define itself? Not every young entrepreneur is automatically a startup entrepreneur. According to the definition of the Swiss Startup Radar, a scalable business model and ambitious growth plans must be in place and the focus must also be on international sales markets. The business model is based on a science and technology-based approach and a focus on innovation. Last but not least: the donors are return-oriented, their investments should pay off.
Funding generally takes place in different financing rounds. Depending on the development stage, one speaks of seed investments, Series A and Series B financing rounds for the early phases, Series C, D, E, etc. for the later stages – until a possible exit follows at some point, for example through an IPO or the sale to a large investor. An exit is, so to speak, an indicator of the “maturity” of a startup ecosystem and is important for the system’s own dynamism: it produces selling (previous) investors and founders who, in turn, reinvest in new startups or re-establish startups.
You can read more about innovation strategy and startup financing here:
https://proptechmarket.net/impulse