A new report highlights the nascent nature of property technology innovation in Canada, as well as its rapid rise to relevance.
The annual “Proptech in Canada” report, published by Toronto’s Proptech Collective, offers an an in-depth exploration of the nation’s growing proptech landscape.
The 2024 edition of the report, which features data from more than 500 active proptech firms, shows that more than three-quarters of proptech companies in Canada were founded within the last decade, and roughly one-third have launched within the last five years.
About 28% of Canadian proptechs are at the pre-seed level, data from the report suggests, with about half at Seed stages. Only 14% have achieved exits.
Nearly half of all proptechs in Canada are based in the Greater Toronto Area, with the vast majority of the remainder concentrated in Vancouver, Calgary, and Montreal.
It may be more expensive than ever to afford housing in Canada, but tech startups are at least ensuring the process of finding, buying, and selling real estate is as slick as possible.
Moving forward, as this latest wave of tech approaches the real estate mainstream, “it really feels like proptech is entering its next era,” says Stephanie Wood, who serves as Vice President at Alate Partners.
Wood, who headed Proptech Collective’s report, said that, “Over the past decade, we’ve learned invaluable lessons about the proptech industry.”
What does she mean by this?
“Early business models have made us smarter about what works; customer expectations have evolved to prioritize technology that has an ROI; and founders are building with a sharper focus on efficiency and strong unit economics from the start,” Wood explains.
“As investors, we’ve become more discerning, recognizing the distinction between technology and real estate fundamentals,” she added. “And now, with the potential of AI layered on, we think it’s an incredibly exciting time for the industry.”
While founders and investors aren’t strangers to artificial intelligence, its application in the industry is still in its infancy, Wood says. The report highlights the vast potential AI still holds for transforming various related industries including construction, residential, and commercial real estate—but for now many solutions remain “exploratory.”
As the future unfolds, the report anticipates a continuation of current trends. For example, it predicts that technology and processes will make home buying and selling more efficient than ever, as has been happening over the past decade. The report also suggests modular and offsite construction will see advances in scalability that could expedite building processes.
“The Canadian real estate industry faced a transformative moment in 2024,” declared PwC Real Estate Leader Fred Cassano, citing “elevated interest rates, tight financing, and rising construction costs” that “continue to challenge growth, while evolving demands, sustainability concerns, and technological advancements redefine opportunities.”
Broadly speaking, the report’s conclusions echo those from last year, with integration and AI leading the charge for relevance, prevalence, and impactful change throughout Canada’s real estate industries.
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