PropTech cool this hot summer as M&A activity, funding ebb

Commercial Observer – July 25

When Simon & Garfunkel sang “The Sound of Silence” back in the 1960s, they could have been singing about a PropTech ecosystem that currently finds itself in the depths of summer doldrums. “The amount of funding raised by PropTech startups in Q1 2023 was down 30 percent from the same period in 2022,” said Ashkán Zandieh, founder and co-chair at the Center for Real Estate Technology and Innovation (CRETI). “This is likely due to a number of factors, including rising interest rates, inflation, and general market conditions.” Meanwhile the number of PropTech startups founded in Q1 2023 dropped 20 percent from the same period in 2022, likely due to the factors that are causing a drop in funding, as well as overall economic uncertainty, he added.

News

New language in California’s privacy law would radically increase consumers’ power over AI

Fast Company - July 24

Californians could soon have the right to “opt out” of a wide range of encounters with automated systems, based on newly proposed regulatory language that would offer residents some of the nation’s strongest safeguards against the use of artificial intelligence. Under the proposal, California consumers could decline to be subjected to any business’s automated decision-making system in areas including housing, education, employment, criminal justice, healthcare, insurance, lending, or “access to essential goods, services, or opportunities.”

Fractional investing platform CEO out after investors lose $63M

Inman Connect – August 1

CrowdStreet, a platform for small-time investors to buy equity in commercial real estate, told The Wall Street Journal it had replaced Tore Steen as head of the company amid questions about its performance and $63 million of investor money that went missing. Nightingale Properties raised $64 million from hundreds of CrowdStreet investors to buy office buildings in Atlanta and Miami. The listing advertised eye-catching 28.1 percent returns on investment, The Wall Street Journal reported. Instead, nearly all of the money raised by CrowdStreet investors went missing, including into accounts controlled by Nightingale CEO Elie Schwartz, according to multiple reports about a bankruptcy filing related to the investment.

Deals

Chicago climate-tech investor raises $300 million

Crain's Chicago Business – July 27

A Chicago-based venture-capital investor in climate-related software and other digital technologies has raised another $300 million for later-stage deals. Energize has raised four funds, totaling more than $1 billion. In addition to Invenergy, other financial backers of Energize include sovereign wealth funds, such as CDPQ, Credit Suisse, family office investor Caprock, Hannon Armstrong Sustainable Infrastructure Capital, and Xcel Energy.

Skillit raises $8.5M in additional funding

FinSMES – July 20

Skillit, a New York-based provider of a data-driven recruiting platform for skilled, full-time construction labor, raised $8.5 million in additional funding. The round, which brought the total amount to $13.6 million, was led by MetaProp and Bow Capital with participation from existing investor Building Ventures. Led by Fraser Patterson, CEO and Founder, Skillit is a recruiting platform purpose-built for construction that uses data to solve shortage of skilled labor.

Commercial furniture and equipment procurement platform Source snags $8.5M

GeekWire – August 1

Source, a Portland, Oregon-based startup that helps architectural and design firms procure interior design products for commercial real estate projects, has raised $8.5 million. The company’s platform helps interior designers manage budgets, select products, and make purchases. Source’s digital tools are primarily free for architects and designers, with some paid services and components available.

Fintech Stavvy acquires servicing tech firm Brace

Housing Wire – August 1

Stavvy, a fintech company specializing in digital and remote collaboration for lending and real estate companies, acquired Brace, a digital mortgage servicing platform. Terms of the deal were not announced. Homeowners can now apply, submit documentation, track progress, receive a prompt decision, and electronically execute relevant documents, the Boston-based fintech said.

PropTech firm Inspace completes $6M Series A raise

Connected Real Estate Magazine – July 10

Property technology company Inspace recently completed a $6 million Series A funding round, Startup Daily reports. Facebook co-founder Eduardo Saverin’s B Capital and current investor Our Innovation Fund led the round. Inspace, whose software platform allows real estate agents and building owners to showcase their properties virtually and in 3D, also raised $4 million in a pre-Series A round in October 2021.