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Proptechs, or real estate start-ups, have been growing quickly due to the high demand in India's real estate industry, particularly in the residential segment. These forward-thinking businesses use technology to revolutionize a range of real estate activities, including interior design and property management as well as the purchase, sale, and rental of real estate.
Interestingly, a number of proptechs have already attained unicorn status, meaning their valuation exceeds USD 1 billion. Prominent instances are Livspace, an electronic interior design company, and NoBroker, an internet platform that facilitates direct real estate transactions without brokerage costs. In addition to these unicorns, there exist a plethora of aspirational start-ups, commonly known as "soonicorns," that are positioned to attain unicorn status. In the industry, businesses like Brick&Bolt, PropTiger, MagicBricks, Furlenco, The-HouseMonk, SquareYards, Stanza Living, CRE Matrix, Zapkey, and NestAway are making great progress.
Many of these proptech businesses are well-known and have been running profitably for a number of years. Some are more recent arrivals, but because of their creative products and clever business plans, they are quickly taking off in the market.
The Confederation of Real Estate Developers' Association of India (CREDAI) recently introduced the Spyre Proptech Venture Fund, a USD 100 million proptech fund, in recognition of the critical role proptechs are playing in transforming the real estate industry. The objective of this program is to assist and hasten the development of proptech start-ups that show promise, in collaboration with Neovon and Venture Catalysts.
The fund has already obtained commitments for about 35-40% of its corpus, according to Spyre VC Principal Murali Krishna. The first close is anticipated to occur by the end of the month. Krishna stressed that they are in active communication with possible backers, especially the developer community, who have demonstrated a strong desire to support creative proptech projects.
Twenty to twenty-five of the roughly 125 start-ups the fund has identified as active in the real estate technology industry are possible candidates for investment. In the end, Spyre Proptech Venture Fund wants to create a varied portfolio of about 35 start-ups, covering everything from growth-stage capital to early-stage seed investments.
The fund's starting corpus is USD 50 million, and a greenshoe option allows for an additional USD 50 million to be added. According to its investment strategy, the fund invests about half of its corpus in seed-stage projects and the other half in growth-stage capital. Growth-stage capital might total up to USD 5 million, while seed-stage investments could total up to USD 1 million for each start-up.
Within the broader proptech sector, there are approximately 60-70 subsectors, with around 40-50 key sectors identified for investment. These sectors encompass a wide range of innovative technologies and solutions, from property marketplaces and digital brokerage platforms to property management tools, construction tech, smart home solutions, and more.
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