Proptech Sector Soars in 2024: Funding, Growth, and Mergers

Proptech Sector Soars in 2024: Funding, Growth, and Mergers

In 2024, the proptech sector witnessed an extraordinary resurgence, with the industry's funding growing to $416.49 million after a sharp decline in previous years. This growth highlights the sector's resilience and the growing confidence in its potential. Key players like Oyo, HomeLane, Rentomojo, and several others drove this recovery, bolstered by substantial investments from both domestic and international investors.

A Remarkable Comeback in Proptech Funding

After a difficult period marked by falling investment, the proptech industry experienced a dramatic revival in 2024. Funding surged back to $416.49 million, marking a significant increase compared to the previous years. Back in 2021, the sector had peaked at $1.31 billion, but subsequent years saw a sharp decline. In 2022, the funding had dwindled to $632.5 million, and by 2023, it had hit a low of $122.81 million.

However, 2024 brought new hope. Among the top fundraisers, Oyo, a giant in the hospitality space, led the pack with a remarkable $175 million. Other notable fundraisers included HomeLane, which raised $27 million for its home interiors platform, and Rentomojo, a furniture rental company that secured $25 million. Additionally, Anarock, a real estate consultancy firm, raised $24 million, with several other companies like Amber, Smartworks, and EPACK making notable contributions.

In total, 2024 saw a diverse range of companies attracting capital, from Stanza Living, focused on managed accommodation, to Guardians and Incuspaze, which specialize in co-working solutions.

Financial Performance of Proptech Leaders in FY24

As funding returned, so did strong financial performances. Oyo continued its dominance with operational revenues of ₹5,388.79 crore, followed by WeWork India, Livspace, and Smartworks, which generated ₹1,665.14 crore, ₹1,185.73 crore, and ₹1,039.3 crore, respectively. Other notable companies like Square Yards, Awfis, and HomeLane also contributed to the industry’s top revenue figures.

Despite significant revenues, profitability was mixed. Oyo emerged as a standout with a profit of ₹229.58 crore, largely driven by exceptional items such as a fair value gain from acquisitions. On the other hand, companies like Livspace, IndiQube, and WeWork India saw significant losses. However, with scaling efforts and cost-reduction strategies, these firms were optimistic about trimming losses in the future.

Key Investors and Strategic Mergers

The return of investor confidence in 2024 was evident, with a host of venture capital firms playing a key role in funding the sector. Prominent investors such as Z47 (Matrix Partners), Accel, Blume Ventures, and Inflection Point Ventures helped shape the success of leading startups. Other active investors like Chiratae Ventures, Stellaris Venture Partners, and Gruhas supported a diverse range of tech firms, from Rentomojo and HomeLane to Trampoline and Vaaree.

Additionally, 2024 saw a few significant mergers and acquisitions in the sector. Oyo was particularly active, acquiring G6 Hospitality for $525 million and the Paris-based premium rental homes company Checkmyguest for $27.4 million. Meanwhile, HomeLane set its sights on acquiring DesignCafe, a popular home interior brand, marking another exciting chapter in the sector's development.

Conclusion: A Promising Future for Proptech

The proptech sector in 2024 is poised for growth, with stronger funding, expanding financial performance, and exciting mergers and acquisitions. The combination of investor interest, entrepreneurial spirit, and innovative solutions is positioning the industry for long-term success. As domestic and international players continue to explore new opportunities in real estate, hospitality, and co-working spaces, the sector looks set to thrive in the coming years.