There are already six to seven unicorns in the sector with several more set to join the club
The demand momentum in the Indian real estate market, especially the residential segment, has spurred the growth of PropTechs, some of which have attained unicorn status while there are several others on the way. There are already six to seven unicorns in the sector including prominent ones such as NoBroker, a platform for buying, selling, or renting a house without paying brokerage fees and interior designing firm Livspace.
There are plenty of other soonicorns that are waiting to become unicorns. These include SquareYards, Stanza Living, CRE Matrix, Zapkey, MagicBricks, Furlenco, TheHouseMonk, NestAway, Brick&Bolt, and PropTiger. Many of them are household names already and have been around for a number of years. Others are of more recent origin.
SquareYards, founded in 2014, has a presence in nine countries and has a valuation close to $300 million CRE Matrix, a real estate data analytics platform. Accel and Peak XV Partners-backed co-living solutions provider Stanza Living, founded in 2017, has a valuation of around $470 million.
Recognising the role played by PropTechs, in February the Confederation of Real Estate Developers’ Association of India (CREDAI) launched a $100 million PropTech fund, Spyre PropTech Venture Fund, in association with Venture Catalysts and Neovon – a consortium of builders who have committed to putting up a fifth of the corpus.
The fund has already received commitments for about 35-40% of the corpus, according to Murali Krishna, Principal at Spyre VC. The first closing is expected to be achieved by the end of this month. He added that while it has been around two months since the fund was launched, they had just started actively reaching out to LPs because they first needed to understand the depth of the market and gauge the opportunities in PropTech. He said that a lot of interest was being generated from Indian investors especially the developer community.
So far, it has a pipeline of about 125 start-ups in the real estate space and of this around 20-25 could be potential candidates for funding. The fund is planning to eventually end up with a portfolio of around 35 start-ups.
The initial corpus of the fund is $50 million with a greenshoe option of another $50 million, Krishna said. Around half of the corpus will be for the seed stage and the remaining for the growth stage. Seed stage funding will go up to $1 million and in the growth stage up to $5 million.
Under the overall PropTech sector there are about 60-70 subsectors and of this around 40-50 will be the key sectors.
