Commercial proptech saw $70 million in funding last week, bringing total year-to-date capital investments in commercial real estate technology to $375 million, according to the Center for Real Estate Technology & Innovation.
HqO raised $50 million, while SwiftConnect and Banner each raised $10 million in the past week. But commercial real estate tech funding still pales in comparison to residential real estate proptech funding, which amounted to $400 million in the third quarter alone, CRETI reported.
Recent commercial proptech funding has been funneled toward real estate experience and occupant management technology, pointing to a continued move toward more straightforward needs for businesses. Last week, HqO secured $50 million in series D funding to scale its platform for assessing and indexing employee workstyles and satisfaction with physical spaces. SwiftConnect landed $10 million to support the growth of its connected access enablement technology, which provides mobile-based access credentials for building occupants.
Banner closed a $10 million series A funding round to expand its capital expense platform for institutional real estate owners and developers. The company intends to use the funding to enter new markets, launch products and grow its team, according to the Commercial Observer. The round, led by Blackstone Innovation Investments, Pruven Capital, Fifth Wall, Basis Set Ventures and Y Combinator, highlights a growing connection between proptech and property investment.
“The trajectory of proptech sentiment differs greatly depending on the sector at hand,” said Nicole Schmidt, founder and CEO of Source, who shared her insights in venture capital firm MetaProp’s Mid-Year 2023 Global Proptech Confidence Index. Source is a digital product library and specification platform that connects architects, designers, contractors and other stakeholders in the commercial construction process. In the report, Schmidt notes that while the commercial sector has experienced a “noticeable slowdown,” with a decline in office leasing volumes, tenant improvement projects are still taking place.
The MetaProp survey, designed in collaboration with the Real Estate Board of New York and the Royal Institution of Chartered Surveys, found that 38% of startup CEOs surveyed are focusing on the office sector for commercial deployment, compared with 28% aiming for the industrial sector, 25% for retail and 39% for mixed use.