In recent decades, the real estate sector has undergone a profound transformation. The emergence of new technologies has led to what is known as “proptech,” companies that combine the real estate world with technological innovation to improve how we buy, sell, and manage properties. However, for the first time since their emergence in the Spanish market, the number of proptech companies has begun to decline in 2024, according to the PropTech Trends report prepared by PwC in collaboration with TheFringe/Labs and the API of Catalonia.
Boom and stabilization of PropTech in Spain
Since 2017, the proptech ecosystem in Spain has experienced meteoric growth. That year, barely 50 startups were operating in this field, but by 2023, the number had risen to 548, representing a significant share of the country’s digital economy. These companies are primarily divided into two categories: 60% are B2B, meaning they provide services to other businesses, and 40% are B2C, focused directly on the consumer.
The success of proptech in recent years has been driven by several factors, including the digitization of real estate processes, the automation of tasks, and the integration of emerging technologies such as big data, augmented reality, and artificial intelligence. Thanks to these tools, proptech companies have improved efficiency and transparency in the sector and facilitated more agile decision-making for businesses and individuals.
However, 2024 has marked a turning point. After several years of sustained growth, the market has begun to show signs of saturation, and the figures reflect a slight decline. In the last two years, approximately 90 startups have disappeared, with 48 of them in 2023 alone.
What factors explain the decline?
This decline in the number of proptech companies is not exclusive to Spain. The decrease in startups in the tech real estate sector is being observed globally, partly due to the drop in funding for tech projects, a trend that affects the entire industry. Investors have become more cautious, demanding greater guarantees of profitability before allocating capital to new companies. Moreover, the focus has shifted from prioritizing growth and expansion to concentrating on the profitability and sustainability of businesses.
Another significant factor has been the correction in the valuation of startups. During the boom years, many proptech companies achieved very high valuations that, in some cases, did not reflect the reality of their business. This correction has negatively impacted the ability to access capital for many of them, especially in an uncertain macroeconomic environment characterized by rising interest rates and reduced credit availability.
Concentration of the ecosystem
Despite this decline, the proptech ecosystem in Spain remains one of the most dynamic in Europe, primarily concentrated in Catalonia (32%) and Madrid (29%), with Valencia in third place (8%). This phenomenon reflects a strong commitment to innovation in these urban centers, where companies are adopting new technologies to stay competitive in an increasingly complex market.
In particular, Catalonia and Madrid have attracted more foreign investment, as 12% of proptech companies operating in Spain are headquartered in other European countries like France, Italy, and the United Kingdom, while 4% come from other international markets such as the United States or Singapore. This shows the growing interest of global companies in entering the Spanish market and seizing the opportunities it offers.
Challenges to technological adoption
Although proptech has significantly improved the efficiency of the sector, it still faces significant barriers to more widespread adoption. The cost of technological solutions is one of the main concerns for real estate professionals, along with the lack of adequate technical support to implement and maintain these tools. Additionally, many real estate professionals admit that navigating the ecosystem of more than 500 companies is challenging, making it difficult to identify the most suitable solutions for their needs.
However, the positive impact of technology on the sector is undeniable. 100% of industry professionals acknowledge that technology has improved their efficiency, and 50% assert that it has done so significantly. Furthermore, eight out of ten professionals have noticed an increase in customer satisfaction since integrating new technologies into their processes.
The future of PropTech in Spain
Despite the recent decline in the number of startups, the future of technology in the real estate sector looks promising. Professionals’ expectations are clear: 73% plan to adopt new technologies in the near future. Artificial intelligence, chatbots, and more advanced data integration in CRMs are emerging as key tools to enhance customer communication and optimize business processes.
Generative AI is gaining ground in the sector, and over 60% of the population trusts companies that utilize this technology to make data-driven decisions. In an increasingly complex environment, proptech offers a viable solution to overcome many of the current challenges in the real estate market, and it is likely that, over time, they will continue to be key players in the evolution of this sector.
Although the number of proptech companies in Spain has declined in 2024, the digitization of the real estate sector is just beginning. Companies that can adapt to the new market demands and offer more accessible and efficient technological solutions will continue to pave the way for the future of the real estate market.
