Investment in real estate technology in 2020 decreased notably to only 46% of 2019 levels:
- COVID-19 and the economic shutdown have depressed or delayed funding events. Early activity in 2021 appears to indicate activity picking back up.
- Funding in 2019 included several very significant, mostly late-stage funding rounds that totaled $1.6 billion for iBuyers Offerpad, Knock, OpenDoor, Orchard and Flyhomes.
- Excluding the effects of the iBuyer funding, 2020 investment was 83% of 2019
Special Purpose Acquisition Vehicles (SPACs) had a resurgence in 2020 in the real estate sector, as they did more broadly in the market. The trend continues, and could be a prelude to a growth in M&A consolidation among those companies going forward.
There was strong M&A activity in 2020, particularly among strategic buyers in residential real estate (including rental) and this trend shows all signs of continuing in 2021:
- CoStar Group continued to be very active, acquiring Ten-X in May and HomeSnap in December.
- Strategic companies including realtor.com, RE/MAX, OJO Labs, Elm Street Technology and ATTOM Data Solutions all grew through acquisition in 2020 as well.