The Proptech Revolution | Navigating a Changing Real Estate Landscape

New property technology (proptech) companies are regularly approaching Colliers Canada, introducing tools they believe could revolutionize construction, building management, and energy conservation.

Proptech, which refers to digital platforms supporting the real estate sector, is expanding rapidly in Canada, with over 530 startups tracked in 2024.

Navigating the Fast-Paced Proptech Growth

“Proptech can significantly boost revenue while reducing costs, but the rapid growth makes it challenging to keep up,” says John Duda, President of Real Estate Management Services at Colliers Canada. “Clients feel overwhelmed and uncertain about where to invest.”

To assist clients, Colliers Canada launched the Colliers PropTech Lab, an internal program evaluating various tools and advising clients on the best-suited technologies.

Evaluating Proptech for Real Estate

Over the past three years, the Colliers PropTech Lab has assessed more than 500 technologies, ranging from AI design applications to air-quality sensors and building management systems.

“We provide feedback to companies, explaining why their product may be suitable for one building but not another, based on class, location, and priorities,” Duda explains.

More than 90% of evaluated tools have shown potential for cost and time savings, with many undergoing pilot tests in Colliers’ buildings at no cost to owners.

The Future of Proptech

The need to identify the most effective technologies reflects the evolution of proptech. According to a report from Proptech Collective, the industry is advancing strategically despite a challenging funding environment.

Canadian proptech startups raised approximately $300 million in venture capital in 2024, marking a sharp decline from the $800 million raised in both 2023 and 2022.

Stephanie Wood Vice President at Alate Partners and a founding team member at Proptech Collective, attributes this decline to broader trends in the technology sector, not just proptech.

Reshaping Proptech with AI and Strategic Growth

In 2025, the industry is expected to mature through mergers, acquisitions, and AI-driven efficiency. “Proptech has undergone a reset due to real estate challenges like interest rates, but it’s emerging stronger,” Wood states.

Rather than chasing growth at any cost, many companies are refining their market strategies, diversifying revenue streams, and optimizing expenses.

The Role of Venture Capital in Proptech

Global proptech VC funding has slowed due to stricter lending conditions. However, the average capital raised in seed investment rounds doubled to $2.2 million in 2024 compared to $1.1 million in 2020, according to the Center for Real Estate Technology and Innovation (CRETI).

“A strong vision alone is no longer enough,” CRETI notes, emphasizing the need for startups to demonstrate tangible value before seeking investments.

Canadian Proptech Success Stories

Roger Poirier, co-founder of Hazelview Ventures, highlights that while many proptech startups seek capital, real estate firms are cautious about being early adopters.

Hazelview has only invested in 2% of the companies that approached it. One standout success is Augmenta, a Toronto-based AI platform that optimizes utility layouts in buildings.

Hazelview led Augmenta’s seed-financing round after the startup demonstrated a 40% reduction in time required to model electrical systems in buildings.

The Power of AI in Proptech

Augmenta’s AI-driven generative design evaluates thousands of layout possibilities in real time, enhancing efficiency and reducing costly revisions.

“AI is not a replacement but an assistant that accelerates decision-making and enhances collaboration,” says Francesco Iorio, Augmenta’s co-founder and CEO.

The software continually learns and now designs twice as fast as traditional CAD programs. Augmenta is expanding its AI to integrate electrical, plumbing, and mechanical engineering systems.

AI’s Transformative Impact on Real Estate

Poirier predicts AI will revolutionize commercial real estate by streamlining processes and reducing costs. “A significant portion of construction costs stem from engineering inefficiencies. Optimizing these processes can lead to dramatic savings.”

Colliers PropTech Lab’s Notable Innovations

Colliers Canada has identified several standout technologies through its PropTech Lab:

ParkChamp: A parking app deployed in eight Calgary buildings, increasing total annual revenue by $1 million.

EcoPilot Canada | USA: An AI-powered energy management system that reduced heating and electricity costs by 10% at Halifax’s Maritime Centre.

Tap Report: A digital inspection app used across 11 buildings in Toronto and Atlantic Canada, saving 720 work hours per building annually.