New £90m fund targets British and European ‘proptech’ start-ups

A new fund understood to be around €100m (£91m) aimed at investing in property tech start-ups has been launched in the UK.

The real estate arm of banking giant BNP Paribas and US-based Fifth Wall, the world’s largest venture capital fund focused on so-called “proptech”, will pump capital into early-stage businesses in Britain and Europe.

The investors believe the sector is “underpenetrated” and that the pandemic has accelerated trends towards digitisation and low-carbon projects.

Proptech is loosely defined as anything that has digitised existing processes in the real estate industry. The automation of planning documentation or the use of computer vision for site projections are examples.

Britain dominates the proptech sector in Europe with $5bn (£4bn) having been invested in the market by the end of June 2019 – five times more than nearest rival Germany, according to a recent study by Oxford University.

There are 805 companies operating in the sector in Britain, with 547 in Spain, and another 342 in Germany.

California-based Fifth Wall, which has around $1.2bn in assets under management, has already led a range of funding rounds including a $503m fund also focused on proptech in the US last year. BNP hopes its arrangement with Fifth Wall will act as a “gateway” for European firms to move into the US market.

Etienne Prongué, chief executive of BNP’s real estate arm in the UK, said the deal with Fifth Wall was “strategically important”. BNP said the fund will focus on accelerating the adoption of real estate technology across Europe.

Roelof Opperman, managing director of Fifth Wall, said: “We believe the European proptech market is underpenetrated and has significant room to grow.”

London-based LandFund is among the pre-eminent proptech start-ups in the UK. It acts as a “one-stop shop” for developers, providing a range of insights into the likes of land sale prices, the likelihood of planning approval, and the availability of credit for projects. LandFund was backed by real estate giant JLL to the tune of £2.5m in 2019.

Property giants will undoubtedly be investing heavily in start-ups to help offset the impact of the pandemic. Offices in central London have been tipped to fall in value by as much as 10pc this year.