To keep track of the evolutions of the European Proptech and Contech startups scenes, we're publishing in partnership with the RENT label our Annual Proptech & Contech review, covering the year 2022. The study unravels a still very dynamic ecosystem, marked by the rise of social and environmental impact themes. 

                                                                                    Link to the the Study: https://docsend.com/view/afxvpas7zkixh369‍‍

The year 2022 confirms the growth of the European Proptech & Contech ecosystem, despite an economic climate that remains unstable

€3.1+ billion were raised in 2022 by Proptech & Contech EU startups, which represents €1+ billion more than in 2021 (€2.1 billion raised). This very dynamic growth was largely driven by Q1 2022, which alone saw more than €1 billion raised (nearly 5 times more than for Q1 2021).

Investments remains captured by early-stage startups

As in 2021, the majority of 2022 funding rounds remain very early stage. Nearly 75% of 22 rounds are less than €5 million (almost 340 rounds VS 120 "later-stage" financing rounds with +€20 million raised). While most rounds remain very early, one change should be noted: in 2022, there was fewer pre-seed rounds than in 2021. This is the sign of an ecosystem slowly maturing from pre-seed to seed stage. However, the number of late-stage rounds (over €20 million) is not following the same growth dynamic and remains rather limited due to market conditions. In a nutshell: growth is strongly driven by Seed and Series A / B rounds.‍

2022 confirms investors' growing interest for startups with a social or environmental impact

While 2021 ended with a record proportion of impact/ESG startups funded (nearly 25% of rounds in Q4 2021), 2022 definitely confirms investor's interest for social or environmental impact startups - which represent 40% of the rounds at the end of Q3. This growing interest for impact ventures is also reflected in the most funded themes. In 2022, the "Home Energy Service" vertical - which includes solutions related to the energy renovation of homes and buildings - attracted the most capital, with over €350 million (€200 million for 1Komma5°, €150 million for Deepki...). In comparison, the most funded verticals in 2021 were property management softwares and DIY (mainly driven by the €335 million raised by ManoMano).

We can also see an increase in the number of female founders whose startups have completed a funding round. On average, female (co)founded startups represented 15% of rounds at the beginning of 2021, compared to nearly 20% at the end of 2022. While the number of female-led rounds is growing, the amount of capital raised is stagnating, despite a record second quarter in 2022 (€160 million raised by women founders in Q2, compared to €110 million at the same time in 2021).

Growing investor interest in hardware technologies

The year 2022 highlights a certain evolution in investors' preferences for funded technologies, with a growing interest for hardware technologies. While it accounted for 19% of investments in 2021, hardware represents 25% of funding rounds in 2022 and an invested amount of +800 million euros.

The geographic distribution of financing rounds remains uneven

In Europe, the Proptech & Contech ecosystem remains largely concentrated around France, the UK and Germany. These three markets captured around 70% of the capital invested in 2022, while Southern Europe as a whole attracted 12% of the amounts raised. The United Kingdom was the country with the most rounds of financing in Europe (124, compared to 92 in DACH, 67 in France and 63 in the Nordics). Yet it only captured 18% of the capital invested, a sign that the UK ecosystem is more focused on very early stage startups compared to France (24% of total capital invested in Europe in 2022).

European Proptech & Contech attracts a strong diversity of investors

Proptech & Contech fundraisings are powered by specialized venture capital funds as well as by generalist. Axeleo Capital is the 5th most active European investor, with 9 investments announced in the last two years. We also count many investments from Corporates - such as Signa, CEMEX and JLL Spark - as well as more and more US VC funds deploying significant capital in Europe, such as Fifth Wall or FJ Labs.‍

View the Study: https://docsend.com/view/afxvpas7zkixh369

Methodology:

The "Proptech & Contech Index" is based on data from Axeleo Capital's analysis as well as databases, Dealroom and Crunchbase in particular. These data sources mainly gather information on deals and rounds that have been publicly announced by companies - many other rounds take place, but without announcements or communications on amounts (thus difficult to count).
The analysis is limited to companies with less than 250 employees, founded after 2010, headquartered in Europe and whose value proposition is focused on the real estate and construction sectors. For reported fundraising, we refer to equity venture capital fundraising only (i.e. excluding debt, grants and non-equity funding).

For more information on the Proptech & Contech Annual Review, click here.