Raising decent cash in Africa as a proptech firm, is a complex and difficult undertaking. According to a report from the Africa Proptech Forum in 2020, proptech is out of mandate for regional and local big money.
This is because the local/regional market size is relatively small, making it hard to justify proptech funding value asks.
Also, there are no well-known local success stories available as reference points for potential investors, and because of demand and supply issues- which has led to unfavourable terms for proptech companies
It is estimated that there are 130+ proptech firms in Africa, 85% of which are based in Nigeria and South Africa. Up to 80% of these firms are B2B or B2C focused with only about 20% focused on both.
The forum also revealed that 50% of Africa’s proptech firms are focused on Big Data and Data Analytic technologies with only 19% of the firms focused on property management
South Africa’s HomeME is the most funded proptech firm in Africa with over $13,6million raised to date.
Key Covid-19 related technologies being implemented across existing buildings and new developments on the continent include thermal cameras, contactless access points with Bluetooth/mobile integration, automated control systems for air filtration as well as office occupancy tracking hardware and software.
“We are entering a hybrid future where tech automates processes and people focus on the relationships to get jobs done resulting in a reduction in costs across the value chain,” reads the report from last year’s Africa Proptech Forum
“The need for an end to end solution throughout the sale and rental process will drive the consolidation of all current market places and platforms,” it adds.
The report affirms that agents/agencies will not disappear, however, they will need to adapt and work with the new platforms and embrace technology in order to remain relevant.
“The need for the human service in real estate still exists,” it says.
Africa and other emerging market bottlenecks for proptech firms include the costs and complexity, lack of access to quality data, high level of incompetence and red tape at the public sector level, low internet connectivity and penetration levels.