Proptech Collective recently released its third annual Proptech in Canada report, which highlights the many startups and trends shaping the future of the real estate and construction industries.
Proptech is flourishing in Canada
Canada is not just establishing itself as a prominent North American tech hub, but it’s also emerging as a haven for real estate innovation, supported by attractive immigration policies, access to a robust talent pool and enhanced support for innovation programs.
In the last year alone, over 50 new startups have become part of the Proptech Collective database, bringing the total to 500 active proptech companies. Looking into startups across commercial real estate, residential real estate and construction tech sectors reveals the following highlights:
Hub concentration. Approximately 77 per cent of Canadian proptechs are located in five major hubs — Toronto, Vancouver, Montreal, Calgary and Kitchener-Waterloo — with nearly 46 per cent located within the Greater Toronto Area.
Startup evolution. A significant 75 per cent of Canadian proptech startups have been launched within the last decade; 40 per cent emerged in the past five years.
Financial milestones. Even in a challenging market environment, Canadian startups have collectively raised over $1.5 billion in funding since June 2022.
Industry segments. Residential real estate proptechs make up more than 40 per cent of all proptech startups across the country.
Significant newcomers to the space included Adaptis (circularity and decarbonization planning software), Chexy (rental rewards platform), Doormat (a modern lawyer for real estate transactions that real estate agents and clients benefit from on cost, efficiency and transparency), Wiseday (instant, digital mortgages) and Landslo (lead generation for mortgage and agents).
Navigating future trends
Four trends were clear from the conversations with entrepreneurs, real estate leaders and investors:
- Decarbonization. With a focus on sustainability, experts are prioritizing the integration of ESG (Environmental, Social and Governance) principles and data into the entire real estate value chain — from design through operation to demolition. Examples of areas include sustainable materials, grid stability and robotics aiming to reduce waste for offsite construction.
- Affordability. The widespread issue of affordable housing across Canada is spurring innovation. Examples include alternative financing and co-ownership models to enhance housing security, as well as opportunities where prefab and modular options allow for building faster and more sustainably.
- AI integration. Many of us are no strangers to artificial intelligence, and neither are real estate leaders. From leveraging AI for scenario analysis or even using tools like ChatGPT to automate conversations and listing promotions, there’s a growing consensus on the need for increased adoption of this technology in the industry.
- Integration and consolidation. Proptech’s evolution over the past decade has paved the way for consolidation and partnerships between different startups. Strategic collaborations are starting to allow for more holistic consumer experiences, for example in residential real estate, by integrating search, mortgage and closing processes into one platform.
Paving the path forward
While the last year has proved to be more challenging across the industry given rising interest rates, the need for digital solutions has not diminished.
The future promises not just growth but a transformation. Canada will remain a hub for real estate innovation, shaping a resilient and positive path for the real estate and construction industries. Visit proptechcollective.com to learn more about the Proptech in Canada 2023 report and Proptech Collective’s year-round work.
