2016 was the best year yet for real estate tech funding. Not only did the category reach new highs in deals and dollars, but 4 companies were minted to the unicorn club (Compass, Homelink, SMS Assist, and OpenDoor Labs).
Since 2012, real estate tech companies have raised almost $6.4 billion in funding across 817 deals.
Using the CB Insights database, we analyzed annual and quarterly funding figures as well as deal share by stage within real estate tech.
We define real estate technology as the software tools and platforms used by different participants in the real estate industry, including brokers, investors, real estate-focused lenders, property owners, and managers, as well as buyers. The category includes online real estate rental and buying guides.
Annual deals and dollars
In 2016, real estate tech companies set a new record in both deals and dollars, as the category has every year since 2012. Last year, private real estate tech startups raised $2.6B across 235 deals.
On a funding basis, dollars to the category have trended upwards through the past 5 years, with real estate tech companies increasing funding by 40% in 2016. Notably, there were several large deals in in 2016 that buoyed funding, including three mega-rounds to Homelink ($926M, Series B), OpenDoor Labs ($210M, Series D), and SMS Assist ($150M, Series D).
Quarterly deals and dollars
In Q4’16 real estate tech companies raised roughly $470M across 49 deals.
The quarterly trend reveals that after a record in deal count in Q3’16, deals dropped 28% to 49 deals, the first quarterly drop below 50 deals since Q4’14.
When looking at the quarterly funding trend we see that Q2 was a huge funding quarter for the category, due in large part to the $926M Series B of Homelink. Following Q2, dollars dropped off in the next quarter to the lowest level since Q2’14, but began rebounding in Q4’16, up 54% from Q3. Six out of the last 7 quarters saw more than $400M deployed on a quarterly basis.
Deal share by stage
Early-stage (Seed + Series A) deal share reached a 5-year low in 2016 accounting for 66% of deal share. Early-stage deal share has trended progressively downward since 2012 as the category has matured. Conversely, when looking at mid-stage (Series B + Series C) activity, 2016 reached a new high, accounting for 15% of deal share.
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Late-stage (Series D+) deal share took 4% of deal share. While the late-stage only accounted for 4% of activity, there were some notable deals in 2016, including to Compass, which raised $75M in Series D financing, and Buildium, which raised $65M in private equity funding.
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