We analyse what the Proptech sector is and how this trend is being integrated into the Spanish market through the operations carried out by Housfy and Prontopiso.

We analyse what the Proptech sector is and how this trend is being integrated into the Spanish market through the operations carried out by Housfy and Prontopiso.

What is meant by Proptech?

PropTech, from the acronym 'property' and 'technology', is the name given to the sector of startups that base their business model on combining technological development with the real estate industry. Proptech - or also known as property development technology - was born in the UK in 2014 with the aim of removing many of the obstacles associated with the process of executing real estate transactions, such as property search and rental and investment methods, as well as property management.

Generally speaking, most Proptech startups can be organised into two distinct categories. First, real estate agencies online which through the use of platforms carry out the complete administration of the real estate process, performing the functions of traditional real estate agencies, although it should be noted that the figure of the agent is still in high demand for both buyers and sellers.. Secondly, everything related to alternative lending. In Spain, there are platforms such as Housers, Inveslar or Privalore which offer assets for investment through their platforms of crowdfunding.

In short, Proptech improves efficiency for the real estate sector by providing detailed, real-time knowledge of the real estate market and is a growing trend, as 51% of the homes purchased were found in the form of online the past 2017.

Housfy and Prontopiso: two real estate agency success stories online Spanish

Housfy, the Spanish startup based in Barcelona, is an online platform for buying and selling flats from private individuals created in 2016. However, its pace of growth has allowed it to carry out three rounds of financing, closing two this year. The latest round has reached the amount of €2M and has been carried out by Seaya Venture, positioning the Iberian fund in the lists of the most active in recent years.

The company will use the resources obtained to consolidate its business in Spain. The future strategy, according to Housfy's owners, is to control the largest number of properties in Spain and then access international markets. To do this, they are committed to their users to achieve the sale of the property within 43 days and without agency fees. At the moment, the startup has sold 50 flats a month in one of the highest number of real estate sales at the moment, in addition to an increase in housing prices since the beginning of the housing bubble in Spain. Now, its goal is to reach 21% of market share and 200 homes per month.

Like Housfy, ProntoPiso is a real estate agency. online that guarantees the sale of the property. The peculiarity of Prontopiso is that it focuses on the client who needs to sell their property in order to be able to buy another. In this way, ProntoPiso guarantees the sale of the property in less than 90 days. In the event of not closing the transaction in that period, it advances up to 95% of the market price of the property so that the client can purchase another property. Once the transaction is closed, the remaining amount is handed over to the owner. With this new concept the client has his money guaranteed within 90 days.

Founded in October 2017, ProntoPiso has reached €8.5M in financing, with its latest transaction being the contract for venture debt in which Sabadell Venture Capital, Inveready and other private investors are participating. This transaction, which is worth €4.5 million, will allow ProntoPiso to guarantee the payment of the amounts committed in less than 90 days to the owners of the flats for sale until mid-2019.

In short, this type of financing, which is the first of its kind in Spain, enables ProntoPsio to finance its operations with debt, while maintaining control over its management. In addition, this capital injection will allow the company to consolidate its position in the Spanish residential market, making it one of the most promising Proptech companies at present.

Latest Proptech Investment Figures

Investment in the Proptech sector has increased considerably in recent years. The following table lists five startups that have focused their business model on this area. The last two columns show the amount of investment received and the date of the last investment.