55 M&A deals globally target Proptech firms in the first half of 2022
London, UK – 9 November 2022. The Proptech M&A Market Report from Hampleton Partners, the international M&A and corporate finance advisory firm for technology companies, reveals that the first half of 2022 saw 55 property technology (Proptech) deals, 57 per cent up on 1H2020 and 12 per cent up on 1H2021 numbers.
The previous half-year deal count high was 2H 2019, pre-Covid pandemic, when 63 Proptech deals were completed.
Axel Brill, managing director, Hampleton Partners, said: “The Proptech market doesn’t appear to be slowing down, despite recent market volatility, as capital continues to flow in and the market remains thirsty for technological innovation, especially where it drives operational efficiency.”
Enterprise Real Estate Software M&A
The largest of the Proptech segments, capturing 25 per cent of all M&A activity over the past five years, Enterprise Real Estate Software such as document management and e-signing has become a vital replacement to traditional manual documentation delivery to counter travel restrictions, social distancing and remote work, experienced most sharply throughout 2020.
Real Estate Fintech
Deal flow in the real estate Fintech segment proved strong in 1H 2022, despite challenging macroeconomic conditions. Deals increased by 167 per cent between 1H 2021 and 1H 2022. Like most other subsectors, deal volume declined in 1H 2020 as a result of the COVID 19 pandemic.
Two examples of deals in the real estate Fintech segment are:
- US-based public company Porch Group’s acquisition of Floify Inc. in a deal valuing it at $86.5 million, late 2021. Floify provides the real estate and finance sectors with automated mortgage origination and management SaaS as well as document management capabilities.
- In May 2022, Altus Group’s $28.8 million acquisition of Canada-based Rethink Solutions. Rethink Solutions provides an AI-powered property tax management software with open APIs for firms operating in the North American real estate market. Additional features include tax and expense management, value assessments, budgeting & forecasting, and tax saving tracking software.
Property Management SaaS
Deal volume in the Property Management SaaS hit a record high in 2H2021 recording an enormous 250 per cent jump over the previous quarter and a 75 per cent rise over 2H2020.
Aareon’s acquisition of Momentum Software Group in June 2022 is a good example of an acquisition in this space, enabling Aareon to corner the Nordic market.
Momentum, provides property management and energy monitoring software, as well as related APIs for property owners. The software helps firms to manage units, develop housing, monitor energy data, and analyse consumption behavior.
Top acquirers of Proptech companies - past 30 months
The top two acquirers of Proptech companies over the past 30 months and their three most recent acquisitions are:
- MRI 12 acquisitions including: Apartment Data Services; Property Suite NZ and Angus Systems
- CoStarGroup 6 acquisitions including - Business IMO; ComReal; Homes.com
The future of Proptech technology M&A
Axel Brill, managing director, Hampleton Partners, continued: ”Companies need to flex their M&A muscles and acquire competitive capabilities before interest rates rise even further, whilst also disposing of non-core assets to cut unnecessary costs.
“We expect larger technology companies, both public and private, will continue to actively engage in M&A to accelerate time to market and fill in product gaps. This is vital for tech giants as their competition intensifies during market downturns. As for Proptech valuations, the market will limit high valuations to businesses that have simultaneously demonstrated growth and profitability.”
Hampleton Partners’ Proptech M&A Market Report Content
Hampleton’s Proptech M&A Market Report 2H2022 is a snapshot of key transactions, valuations and trends across the sector over the past five years, with a focus on Enterprise Real Estate Software, Transactional Real Estate Platforms, Real Estate & Construction IT Services, Property Management SaaS, Real Estate Data & Analytics, Real Estate Fintech and more.
Download the full Hampleton Partners’ Property Technology M&A Market Report: