Venture capital investment in China’s PropTech

Updated: Aug 6

by

Leo Lo, Founder of Asia PropTech



In recent years, the development of PropTech in China has accelerated. Before understanding the trend of venture capital investment in China’s PropTech industry, we must first explore its recent development trend.

Many Chinese enterprises have set foot in PropTech, implying they will vigorously implement and practice PropTech on a corporate level. Evergrande Group, for example, in cooperation with the Chinese Academy of Sciences, is planning to invest RMB 100 billion in the next 10 years on technologies like new energy, AI and robotics. Poly Group's first tech incubator “Poly Technology Innovation Headquarters” was launched in December 2017, focusing on smart cities R&D. 

To sum up, the current direction in China is to cooperate with different tech companies or universities to implement accelerators and incubators. These will specialize mostly on smart cities, tech-towns, and smart homes. The future trend of China's PropTech is predicted to be AI-driven, 5G as the backbone, and IoT as the touch point to innovate the use of various spaces.

Regardless of technology giants such as Tencent and Alibaba in China, which have begun to invest in PropTech start-ups, there are also countless foreign venture capitalists targeting the Chinese market. According to a report jointly released by JLL and TechinAsia, the number of PropTech start-ups in the Asia-Pacific region (of which China accounts for the majority) has exceeded the sum of Europe’s and the United States’. From 2013 to the first half of 2017, the investment of 179 PropTech start-ups in the Asia-Pacific region was approximately US $ 4.8 billion, accounting for more than 60% of the global PropTech investment.

The PropTech VC market in China has attracted both domestic and foreign venture investments. Three major domestic companies in China - Baidu, Tencent and Alibaba, prefer post-seed investments which are in line with their business’. The investment scope of international venture capital is relatively broad, focusing on trending industries or technologies , and A and B round investments. The VC investment of Chinese PropTech will only become more popular with the rising number of start-ups and the prevailing development of PropTech.

To bring the Chinese PropTech market to the next level, it is essential for the entire PropTech ecosystem to cooperate to utilize various resources. There are different stakeholders in the ecosystem, including start-ups, investors, real estate experts, technology giants, large developers, etc.. A good ecosystem must connect all stakeholders, sharing resources and cooperating with each other. 

JLL, Swire Properties, and Ping An Urban Tech jointly launched UrbanLab, China’s first PropTech enterprise-level accelerator in July 2019, to connect tech startups, industry leading companies and experts. Through guidance, funding and a testable environment, it is believed that the development of PropTech can be promoted through cultivating more potential and innovative PropTech enterprises.


You can find out more about Asia PropTech here www.asiaprop.tech

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