African 2023 PropTech RoundUp: $16.2 million raised by Proptech startups in Africa.
African PropTech RoundUp: 2023 Funding Landscape Analysis
PropTech RoundUp is pleased to share the second edition of 'The African PropTech RoundUp,’ providing comprehensive coverage of the 2023 funding landscape.
This mini-report is essential reading for anyone interested in the African PropTech industry. It provides valuable insights into the current state of the market, as well as the key trends and challenges shaping the future of proptech in the continent.
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African PropTech 2023 Funding Landscape Analysis:
The global proptech market was valued at $26.8 billion in 2022 and is projected to reach $119.9 billion by 2032, experiencing a compound annual growth rate (CAGR) of 16.5% from 2023 to 2032. As the global proptech industry continues to evolve, so does the African proptech sector.
The Africa’s Proptech sector is catching up with the rest of the world. In the last few years, interest in the industry has grown both from investors' and entrepreneurial perspectives. Proptech startups in Africa are leading the way in reshaping the real estate industry on the continent. From Morocco to Egypt, Nigeria to South Africa, and Kenya. These companies are using technology to make it easier for Africans to buy, sell, and rent properties, and they're also making it easier for landlords to manage their properties. As a result, some of these companies are attracting funding from local and global investors.
The African Proptech sector experienced a notable shift in 2023, with startups attracting a total of $16.2 million across six deals. While the total funding remained close to the previous year’s figure ($16.7 million), the number of transactions decline to six.
The year 2023 witnessed a distinct regional dominance in terms of PropTech funding. The frontrunners were;
Location: Egypt
Funding: $4.9 million
Segment: Property marketplace
Date: May 10
Round: Seed
Real estate marketing company Coldwell Banker Egypt has teamed up with Estate Waves to announced the launch of a new proptech company dubbed Meta Egypt, in an official press conference that was made public on 10th May 2023.
The new-look startup has raised EG 150B ($4.9m) from an undisclosed source and will feature 30,000 residential, commercial and administrative units from more than 100 of Egypt's largest developers in a bid to bring more visibility to Egypt's available real estate to a wider audience across Africa and worldwide.
Location: South Africa
Funding: $4.5 million
Date: January 17
Segment: Property marketing
Round: Pre-series A
On January 17 2023, South Africa’s Proptech startup Flow Living announced a $4.5 million pre-series A funding round. As reported by TechCrunch, Flow wants to change how real estate agencies, developers, and agents interact with their end customers. With its APIs, Flow connects to the websites of estate agencies and property developers and automates advertising for them on social media channels.
The funding round was led by Futuregrowth Asset Management with $2 million, followed by Endeavour Harvest Fund and serial entrepreneur and investor Steven Heilbron. Initial investors Kalon Venture Partners, Vunani Fintech Fund, and Buffet Investments also increased their investment in the company.
3. Jumba
Location: Kenya
Funding: $4.5 million
Segment: Construction technology
Date: February 19
Round: Seed
On February 19 2023, Kenyan Construction Tech startup Jumba announced a $4.5 million seed round to simplify the sourcing of construction materials through a common marketplace for retailers and developers, that takes away the headache of dealing with multiple suppliers. Customers access products through its web platform, but a team of sales associates in the different counties helps with client sourcing too. Jumba then negotiates discounted prices (plus their markup) with manufacturers.
The round was led by LocalGlobe, with participation from Enza Capital, which led its $1 million pre-seed round last year, Foundamental, Seedstars International Ventures, Logos Ventures, Speedinvest, First Check Africa, and the Alumni Angel Network
Location: South Africa
Funding: $1.6 million
Segment: Smart Parking
Date: November 30
Round: Transformative Fundraise
admyt is a leading digital parking management platform which uses license plate recognition (LPR) software and smartphone technology to offer cashless, ticketless & touch-less parking. With a track record of delivering world-class, tech-enabled ticketless parking since 2015, admyt is trusted by prominent property owners and operators, and its offering can be found at leading retail, office, and mixed-use precincts across South Africa
On November 30, admyt announced that it has agreed terms with REdimension Capital regarding a c. ZAR30 million investment into the company. The investment will be used to drive product enhancements, expand the number of admyt-enabled locations and to scale its dominant user base across its focused nodes in South Africa.
5. HouseAfrica
Location: Nigeria
Funding: $400,000
Segment: Blockchain
Date: March 27
Round: Pre-seed
HouseAfrica, a Nigerian proptech startup providing real estate digitalisation and transparency tools, on March 27 2023 announced the unveiling of Sytemap.com a product that enhances confidence and eliminates fraud in land and real estate transactions across Africa. The new tool leverages blockchain and map technologies to make it easier for buyers to verify the authenticity of the lands and also get blockchain-powered proof of the allocation of the land when purchased.
The company announced the closing of $400,000 Pre-seed funding from leading African & global investors like Future Africa, SSE Angel Network (SSEAN), ARM Labs, CV VC, Startupbootcamp Afritech, Niche Capital, Rebel Seed capital and other.
Location: South Africa
Funding: $161,000
Segment: Insure-tech
Date: August 31
Round: Seed
On August 31st, South African insurtech startup LeaseSurance announce its ZAR3 million (US$161,0000 ) in seed funding to expand its team and further develop cutting-edge technology solutions for the real estate industry.
LeaseSurance uses financial technology to optimise assets in rental real estate by replacing security deposits with lease insurance. The platform offers a comprehensive B2B solution to rental real estate owners and operators, providing them with a data-driven risk engine and data platform to boost operating income and optimise portfolio performance.
The ZAR3 million (US$161,000) seed financing round was led by Fedgroup Private Capital, and sets the stage for the company to build on its offering.
Shifting African Proptech Funding Trends:
Market Dynamics:
2022: Witnessed expansive horizons as African Proptech startups amassed a total of $16.7 million across 10 startups.
2023: Indicated a shift towards a more targeted growth approach, with the funding landscape reflecting $16.2 million raised across 6 startups, showcasing a nuanced evolution in market dynamics.
The PropTech funding landscape experienced a noteworthy transition between 2022 and 2023. In 2022, a broader approach prevailed, with ten startups raising a total of $16.7 million. Conversely, 2023 showcased a more focused strategy, with funding amounting to $16.2 million across six startups, reflecting a deliberate shift in market dynamics towards targeted growth avenues.
Geography Dynamics:
2022: Primarily focused on Nigeria, Egypt, and Kenya.
2023: Expanded to include South Africa, signaling a geographical diversification and a broader reach within the continent.
The geographical landscape of PropTech investments has also evolved. In 2022, the investments were primarily focused on Nigeria, Egypt, and Kenya. However, in 2023, the geographical reach expanded to include South Africa, indicating a broader regional impact.
Investment Stage:
A notable shift in funding strategies is evident in 2023. More startups are now raising seed financing, indicating a focus on early-stage growth.
The investment landscape in proptech is diverse, with a significant portion of funding concentrated in the early stages of startup development. In 2023, Seed-stage investments dominate the scene, comprising 59.78% of all investments.
Segment Diversity:
2022: Explored various sectors within Proptech.
2023: Continued sector diversity, adapting to emerging opportunities and challenges.
The PropTech sector continues to showcase a diverse range of startups, reflecting the evolving opportunities in the African real estate market.
The types of startups attracting funding also reveal a fascinating shift in the African proptech scene. Beyond the standard property search platforms (Meta Egypt), investors are now backing ventures tackling crucial challenges like property verification through blockchain (HouseAfrica), construction optimisation with technology (Jumba), Smart parking management (admyt) insure-tech platform (Leasesurance) and Property marketing through automation (Flow). This embrace of diverse and innovative solutions demonstrates a growing maturity within the proptech ecosystem, as startups address not just accessibility but also the broader complexities of the African real estate market.
Regional Analysis:
South Africa: Leading the way in terms of funding in 2023, with $6.2 Million. South Africa saw investments in startups like Flow ($4.5 million pre-series A) , admyt ($1.6 million), and Leasesurance ($161,000 seed funding).
Egypt: Egypt followed closely behind, with Meta Egypt raising $4.9 million seed round.
Kenya: Kenya also made its mark on the PropTech funding landscape, with Jumba raising $4.5 million Seed.
Nigeria: Nigeria, with HouseAfrica raising $400,000 Pre-seed.
Comparative Analysis: African PropTech Funding Amidst the Global $11.38 Billion Influx in 2023
While the Africa’s proptech funding landscape in 2023 may seem conservative compared to the global proptech boom, it represents a strategic shift towards long-term sustainable growth for the African sector.
As reported by the Center for Real Estate Technology and Innovation (CRETI), the global Proptech sector secure over $11.38 billion in funding in 2023. When juxtaposed with the African Proptech landscape, it's evident that the global Proptech sector significantly outpaced the African market in funding
While Africa experienced a slight shift in funding from $16.7 million to $16.2 million in Proptech funding between 2022 and 2023, the global figure of $11.3 billion illustrates the substantial gap between the two scales. This disparity underscores the relative infancy and smaller scale of the African Proptech ecosystem compared to the global stage.
The global Proptech sector benefits from more mature markets, increased investor interest, and robust technological infrastructure in various regions across the globe. Conversely, the African Proptech landscape is gradually gaining momentum, showcasing potential and attracting investments, albeit at a smaller scale compared to the global picture.
The considerable funding disparity between Africa and the global Proptech sector highlights the opportunities for growth and expansion within the African market. It indicates the room for development and the potential for increased investments, technological advancements, and market maturation within the African Proptech sphere in the years to come.
The funding in Africa's PropTech landscape, which decline from $16.7 million to $16.2 million between 2022 and 2023, represents a minute fraction when compared to the global Proptech funding of over $11.3 billion in 2023. To put it into perspective
The percentage of African Proptech funding in 2023 ($16.2 million) compared to the global PropTech funding ($11.3 billion) is approximately 0.14%, highlighting the substantial gap between Africa's Proptech investments and the global market.
Challenges and Opportunities in Africa's Proptech market:
While the future of proptech in Africa shines brightly, the market presents its own set of hurdles, including a highly fragmented and localized market alongside limited access to data and financing—both significant obstacles to streamlined operations and growth.
While these hurdles pose complexities, they are not insurmountable. Proptech companies that provide localized, smart solutions catering to diverse African markets could see substantial traction. A conducive entrepreneurial ecosystem, increased venture funding, need for innovative solutions to local problems as well as high tech adoption are all factors that point towards a high growth curve in the near future.
Africa’s Proptech startups are now looking beyond low-tech property search. Startups are tackling; property verification, construction optimization & costs, rent financing, Coliving, property & facility management, tenant experience, and blockchain, are tools that can solve our housing problem at scale.
The 2023 funding trends in African Proptech are positive, indicating a period of continued growth and investor confidence. The sector is still in its nascent stage but showing signs of rapidly evolving, with startups across various regions finding innovative solutions for the African real estate market. As the industry matures, expect to see increased collaboration and further diversification in the coming years.
What's next for African Proptech in 2024? Stay tuned for more insights and trends as the industry continues to evolve.
Methodology:
The African PropTech RoundUp relies on publicly disclosed information from sources like Crunchbase, and primarily focuses on venture capital fundraising, excluding debt, grants, and non-equity financing.
The data were collected at the time of the funding announcement, acknowledging that numerous raises might occur without public disclosure of amounts, making tracking challenging.
About PropTech RoundUp:
PropTech RoundUp , is the go-to newsletter for Proptech in Africa. We cover trends, fundraising activities, and provide insights into the rapidly growing Proptech and Construction technology sector in the continent.