Menu
Chapitres

Chapter 5: Competing Industries

$602.25
MILLION

Overview

This chapter considers PropTech in comparison to competing industries. While we do have an eye toward the market as a whole, we pay special attention to comparisons between PropTech and 3D Printing, AgTech, AI, Climate Tech, ED Tech, ESports, FinTech, HealthTech, and VR.

During the past fiscal cycle, we can follow the largest median deal size of competing industries to gain a sense of the way that these industries are subject to a variety of conditions. For instance, it is not a surprise that the competing industry with the largest median deal size in June 2022 was Infrastructure. June is a time when there is much thought put into infrastructure development, in part because planners and investors have a good sense of what can be completed before the coming winter, and therefore what can be planned for the coming calendar years. However, other competing industries are less obviously impacted by annual consumer cycles. For instance, the breakout months for Beauty was October, which is a couple of months before the most significant sales month of that industry, in December. Additionally, the biggest months for Impact Investing were February and April. The largest deal for Impact Investing during the year was also, quite notably, within the Climate Tech industry, when Nextracker secured $602.25 million in a second public offering on the NASDAQ stock exchange, $518.68 million of which was proceeds.

Figure 32: Median Deal Size by Month 2022-2023

 

 

Figure 32 shows the median deal size by industry by month for the 2022 to 2023 fiscal cycle. In this figure, no categories overlap. Our data sorts companies by primary industry and then aggregates the totals by month. What we note is that the PropTech industry has a much more stable month-to-month median investment size, ranging between $1.25 Million USD and $5 Million USD. These indicators suggest the PropTech industry is relatively stable throughout the fiscal year and not so much impacted by consumer spending cycles, when compared to some other industries. In part, this is perhaps because the Real Estate aspect of the PropTech industry addresses a basic human need that is in demand during every month of the calendar year. Yet, another way we might measure relative activity of an industry is by the deal count.

Figure 33: Deal Count 2022-2023

 

Figure 33 examines several competing industries by deal count for the 2022 to 2023 fiscal cycle, with an emphasis on those most closely comparable to the PropTech market. In this figure, no categories overlap. Our data sorts companies by primary industry and then aggregates the totals number of deals by industry.

Overall, the most active industries, naturally, are AI & Machine learning (with over 11 thousand deals) and SaaS (with over 8 thousand deals), along with E-Commerce and HealthTech (With over 6 thousand deals each). PropTech is safely comparable to industries like Digital Health, Cybersecurity, Robotics and Drones, AgTech, and Mobility Tech in its relative activity. In the past year, PropTech has closely matched AgTech in terms of number of deals completed. Each of these industries has completed around 1 thousand five hundred to 2 thousand deals in the past fiscal cycle. We see PropTech is far above markets like Healthcare Tech, VR, ESports, ED Printing, and AI.

At the same time, we see the marketplace is slightly less active than EdTech, Climate Tech, and FinTech during the past fiscal cycle. These numbers, in part, signal a changing landscape for technology investments in the past 20 years.

Figure 34: Top 500 Deals, Select Competing Sectors, 2002-2023

 

Figure 34 shows the top 500 deals of some select competing sectors in our dataset in the past twenty years. What we see from this data is that the really big deals in the period from 2002 through about 2009 were mostly in Manufacturing, with some significant deals in AdTech, TMT, and Life sciences. In the years immediately after the Global financial crisis, AdTech had a few breakout deals, including Facebook’s (now Meta) IPO in 2012. Then, by 2015, markets had clearly recovered, and we saw enormous M&A deals in AgTech, with Monsanto and Syngenta. Dell EMC’s Buyout/LBO was brought Cybersecurity to the fore in 2016, which is significant because VMWare’s M&A deal announced in May 2022, represents the single largest deal in the dataset at $70.42 Billion, although it is closely followed by Activision Blizzard’s announced/in-progress M&A in the gaming industry. By far, the most significant deals were in the FinTech space, which accounted for more than half of the top segments of the market share.

In the FinTech space, the market was dominated by just a few companies at the top, including Ant Group, First Data and Alibaba Group. Ant Group, for instance, has raised over $80 Billion USD to date, and just secured $6.5 Billion of debt financing to help the company achieve net zero by 2030. As an operator of a cloud-based financial platform, the company’s platform provides digital payment tools, including for government affairs and small businesses. By single deal size, the next largest deal was completed by First Data. Even though first data has raised significantly less over the lifetime of their company, their impressive sum includes the $46.47 Billion acquisition deal by Fiserv in 2019. With such massive deals being completed in the FinTech space, it is not a surprise to see FinTech deals were among the top deals completed by companies in competing industries. Indeed, FinTech remains the most significant share of the market. At the same time, Climate Tech deals and AI deals were much more significant this past year when compared to the long term trend.

Figure 35: A Selection of the Top 500 Deals in the Past Year by Competing Industries

 

Figure 35 shows a selection of the top 500 deals in the past year, among competing industries. The year started off with a major M&A deal in TMT, followed by Unity’s announced M&A deal in Augmented Reality, although the latter deal has been subsequently canceled. Citrix Systems completed a Buyout/LBO deal in Cybersecurity in September and Change Healthcare completed a major M&A deal in HealthTech in October. However, the winter and spring have resulted in smaller deals, although Intel completed a significant IoT Debt Financing deal in February of 2023, while Stripe completed a Later Stage VC deal in FinTech that was quite significant in March 2023.

The most significant Climate Tech deals were from companies offering electric batteries (Northvolt), construction solutions (H2 Green Steel), and energy solutions (Archaea Energy and X Energy). Of these, the work of H2 Green Steel in the construction technology space has the power to transform the PropTech industry, and the company may shift its dynamic in the future, to becoming more of a PropTech “Building” category company, although that shift has yet to occur. Similarly, although Northvolt presently works purely on electric vehicle batteries, the impact of technology could transform many elements of the PropTech ecosystem in the near future. Additionally, although PropTech cannot match the titanic impact of FinTech, the present ecosystem places PropTech in strong competition with AI and HealthTech, with PropTech more closely matching the impact of ClimateTech and HealthTech long-term.